Snapchat has existed for the last 5 years and for a while now, it has been surviving on venture capital funding which is not a good place for it to be. That is why they have been focusing on building their ad product for a while now and judging from a report by an analyst, their efforts will bear fruit in a big way next year.
According to eMarketer, Snapchat is “poised for explosive growth in ad revenues in the coming years” which is definitely a good sign of the adoption of their various ad products. The numbers are also very encouraging: The analysts predict that this year, Snapchat will pull in $366 million which is a respectable amount. However, next year, the company will almost triple that where they predict that Snapchat will pull in $935 million which is impressive comparing year on year growth.
Discover is still Snapchat’s biggest cash-cow and it is one of the idiosyncratic features of the network. Specifically in the US, it generates 43% of the revenues but next year, the tables will turn where Stories will in turn generate 37.8% of the revenue.
eMarketer’s Principal analyst, Cathy Boyle, was quoted giving a reason why Snapchat will have such a huge growth in revenue: “Advertisers are attracted to Snapchat or its broad reach among young millennials and those in Generation Z which are valuable demographic groups for many businesses.”
There is still a problem where the US is still the majority market for Snapchat as it derives 95% of its revenue from the market. If it properly monetizes on other markets outside the US with a sizeable user base, the figures for 2018 will be much higher.