Social media platform Snap has turned around its advertising with revenue growing faster than expected at 21% to $US1.195 billion in the March quarter.
The jump, according to the company, was driven by improvements to Snap’s advertising platform and an increase in demand for direct-response (DR) advertising solutions.
A year ago, Snap reported a 7% fall in revenue to $US988.6 million for the March quarter.
Then it faced an uncertain economic climate, strong competition and some fallout to changes in its advertising platform.
Now its community of daily active users increased 10% to 422 million compared to the same quarter last year.
Average revenue per user was $2.83 compared to $2.58 in the same quarter in 2023.
Snap forecasts June quarter revenue in a range of $1.225 billion to $1.255 billion, implying full year growth of 15% to 18%.
Revenue diversification continues with Snapchat+ subscribers, those who pay a monthly fee for extra features, tripling to more than 9 million subscribers.
“The value we provide our community and advertising partners has translated into improved financial performance,” said CEO and co-founder Evan Spiegel.
“Our large, growing, and hard-to-reach community, brand-safe environment, and full-funnel advertising solutions have made us an increasingly important partner for businesses of all sizes.”
Spiegel told market analysts in a briefing that Snap’s focus on visual communication between friends and family is a strategic advantage.
It has enabled Snap to reach more than 75% of 13- to 34 year-olds in more than 25 countries, with those countries representing more than 50% of the global advertising market.
Small and medium sized advertisers were up 85% and brand-oriented advertising revenue increased 12%.
CFO Derek Andersen said an improved ROAS (return on ad spend) for advertisers translated into accelerating demand.
“We're growing a newer segment of customers here, and I think that's really exciting to broadening out the overall base of advertisers,” he told market analysts.
He said the small and medium-sized customer base is the fastest-growing customer segment.
“Overall, you're seeing a broadening of the base of advertisers,” he said.
“There's a journey. I think that you're going to see advertisers go through in terms of one coming on to the platform, initial testing seeing performance with some of these scaled self-serve products and then being able to grow and optimise.
“And of course as we continue to bring more privacy safe signals into our models and invest in bigger models and get better and better at optimisation and ranking, those products become more performant.
“They deliver better ROAS to those customers. and then give them the ability to bid and expand their budget.”
March quarter 2024 numbers:
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.