Snap says de minimis changes may already be hurting advertising
Snap beat analyst expectations yesterday but the stock dove nonetheless, in part due to macro uncertainty about how President Trump’s policies like tariffs will affect advertising. One area that’s already raising concern for Snap is the advertising budgets of customers who sell goods through the de minimis exemption, which ends Friday and will then drastically raise those customers’ cost of doing business.
“...we’ve heard from a subset of advertisers that their spending has been impacted by the changes to the de minimis exemption,” Derek Andersen, Snap’s CFO, said during the earnings call. “However, I caution here, it’s just really difficult to parse the drivers between the various potential factors there.”
The company declined to disclose how much of its revenue comes from China-based advertisers, like Shein and Temu, which can be deeply reliant on the exemption. Amazon, which reports earnings tomorrow, will likely also feel some pain from the loss of de minimis, as it depends heavily on both sellers from China as well as the ad dollars those sellers spend to boost their products on Amazon’s site.
“...we’ve heard from a subset of advertisers that their spending has been impacted by the changes to the de minimis exemption,” Derek Andersen, Snap’s CFO, said during the earnings call. “However, I caution here, it’s just really difficult to parse the drivers between the various potential factors there.”
The company declined to disclose how much of its revenue comes from China-based advertisers, like Shein and Temu, which can be deeply reliant on the exemption. Amazon, which reports earnings tomorrow, will likely also feel some pain from the loss of de minimis, as it depends heavily on both sellers from China as well as the ad dollars those sellers spend to boost their products on Amazon’s site.
