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Despite Revenue Spike, Snapchat Fails to Dazzle

David Bosley

Here at PBJ Marketing, we’ve been keeping a close eye on Snapchat’s IPO and its development as a powerful marketing tool. Now that the photo-sharing app has had two months to develop as a publicly traded company, there are several implications in its performance.

 

During the first quarter of 2017, Snapchat’s revenue spiked by 286% to more than $149.6 million, but despite this huge performance, some experts speculate that the company isn’t growing enough.

 

At present, month-over-month user base growth has fallen to the single digits, but this isn’t the biggest red flag. At the same time, Snapchat’s ad business has already experienced a quarter-over-quarter revenue decline. However, according to Snapchat’s CFO Drew Vollero, there’s no need for alarm.

 

“This anticipated decline was primarily driven by the expected seasonality of advertising, which comprises the bulk of our revenues,” said Vollero. Specifically, a lack of major events, such as the NFL and college football seasons are significant factors holding back performance.

 

Despite this optimism about Snapchat’s seasonal ad performance, if the app’s user base continues to plateau and they’re unable to offer new viewers for brands’ advertisements, the future looks bleak.

 

Keep checking back to PBJ Marketing’s “Bits of Wisdom” for future Snapchat insights and other industry news and advice.

 

Contact PBJ Marketing today and let’s have a conversation.

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