Snap returns to revenue growth as it reels in more ad $$ with new features
What a snaprise… Just in time for Halloween, the little white ghost came back from the dead. Snap’s revenue grew 5% in Q3 after two quarters of declines. The disappearing-photo company has never been profitable, but its net loss narrowed to a better-than-expected $368M.
Snapstreak: Snapchat gained 9M daily users for a total of 406M. Snappers skew younger, with 75% of 13- to 34-year-olds in 25+ countries using the app.
For comparison: Meta’s Facebook has 2B daily users (about a quarter of the world’s population) and Insta has 500M, while X claims a comparably scrawny 260M.
Getting un-ghosted… Digital ad spend is reviving from last year’s ad-pocalypse. Meta and Alphabet beat Snap to an ad recovery earlier this year, and the rebound continued in their results this week, thanks to improved ad spend on go-tos like Insta and YouTube. But Snap has been sweetening its ad-fferings to stand out. It started sprinkling ads in Stories and Spotlight (its TikTok equivalent) last year, and is making moves in AI:
My AI: Last month, Snap said it’s teaming up with Microsoft to integrate sponsored links into its AI chatbot, creatively dubbed “My AI.” Snap said 200M+ people have sent 20B messages to the bot since its April roll-out.
Beyond ads: Snap said that Snapchat+, a $4/month premium sub launched last summer, now has 5M+ paying users. That’s $240M/year.
Small fish have to stand out… Even though the ad slump has reversed, spend is still limited. Digital marketers have prioritized spending their limited budgets on the big fish: Meta and Alphabet. In response, Snap’s been launching new features like My AI to attract ad $$. If that’s not enough — which, btw, Snap warned ad revenue could wobble this quarter — it could keep itself afloat with subscription dollars.