Snapchat's ad revenue to grow 155.1% by 2017: eMarketer
Snapchat will generate over $360m in global revenue in 2016 and nearly $1bn in 2017 due to millennial and GenZ interest in advertising, according to data researcher, eMarketer. Despite initial criticism of Snapchat’s first advertising offering, ad revenue is due to grow 155.1% by next year and 88.2% in 2018. The video-sharing app has a 31.6% share of social network users in the US, but currently attracts just 2.3% of social networks’ ad money, having only launched its ad service in mid-2015. The growth will likely be due to the growing share of non-US advertisers using Snapchat.

by Jack Loechner , Staff Writer @mp_research, September 16, 2016

According to a new eMarketer study, the social network Snapchat is expected to generate more than $360 million in worldwide revenue this year, with that figure jumping more than 150% to nearly $1 billion by next year. After weathering criticism of its initial ad offerings, Snapchat is poised for explosive growth in ad revenue in the coming years, says the report.

Snapchat Ad Revenues Worldwide ($Millions; % Change Y-O-Y) Year (Paid) Ad revenues Percent Change 2015 $59.2 MM - 2016 $366.7 519.0% 2017 $935.5 155.1% 2018 $1,760.1 88.2% Source: eMarketer, September 2016

Cathy Boyle, eMarketer principal analyst, says that “… advertisers are attracted to Snapchat for its broad reach among young Millennials… and Generation Z… valuable hard-to-reach demographic groups… to engage… Snapchat has expanded its advertising portfolio… “

Continuing with the eMarketer report, while Snapchat holds a 31.6% share of social network users in the US, it only captures 2.3% of social network ad dollars, having launched its ad platform in mid-2015, says the report. Data from the study shows that Snapchat currently derives 95% of its revenue from the US. Where it has a substantial user base, says the report, its share of non-US revenue will grow, and 2018, a quarter of its revenue will come from outside the US.

U.S. Snapchat Ad Revenue Share Worldwide Year % Worldwide Revenue Share 2015 98% 2016 95% 2017 86% 2018 75% Source: eMarketer, September 2016

N.B. In developing certain data for this report, eMarketer built a Snapchat ad revenue model using proprietary consumer adoption estimates, monetization trends at similar social networks, monetization assumptions for different Snapchat ad products (including Snap Ads within Discover and Live story, Sponsored Geofilters and Sponsored Lenses), and monetization assumptions for non-US Snapchat users. In addition, eMarketer conducted interviews with executives at ad agencies, brands, and media publishers.

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