Snapchat ad revenue predictions cut to $770m due to sharing

Tyrone Stewart

Following the success of its parent company Snap’s IPO, Snapchat is poised to make $30m less in ad revenues than originally projected this year due to higher than expected revenue sharing with partners.

According to digital marketing firm eMarketer, despite the scaled back prediction, Snapchat’s ad revenue will still grow by 157.8 per cent year-on-year to $770m in the US. This will amount to 1.3 per cent of the US mobile ad market this year, growing to 2.7 per cent by 2019.

Overall, however, Snapchat could be in for quite a struggle. According to studies conducted by global investment bank RBC Capital Markets, in partnership with Ad Age, Snapchat received low scores in terms of ROI from marketers – when compared to Twitter, Facebook, LinkedIn, Google, Yahoo, AOL, and YouTube.

Elsewhere, eMarketer predicts US digital ad spending is expected to reach £83bn, an increase of 15.9 per cent.

Meanwhile, Google is expected to maintain its advertising dominance, accounting for 40.7 per cent of US digital ad revenues in 2017 – more than double Facebook’s share. Furthermore, Google’s share in search is expected to grow 16.1 per cent to $28.55bn – meaning a 78 per cent claim of the total US search ad revenues this year.

“Google’s dominance in search, especially mobile search, is largely coming from the growing tendency of consumers to turn to their smartphones to look up everything from the details of a product to directions,” said eMarketer forecasting analyst Monica Peart. “Google and mobile search as a whole will continue to benefit from this behavioral shift.”

Facebook, on the other hand, dominates in terms of display – with its US display business set to grow 32.1 per cent to $16.33bn – accounting for 39.1 per cent of the total market and taking share away from Google, Yahoo, and Twitter. Instagram is helping the social network’s revenue growth also. The photo-sharing app is expected to make up 20 per cent of Facebook’s US mobile revenue.