Snapchat CEO Evan Spiegel said that some of his earliest
decisions at the company were prescient, helping position the
company in today’s social media climate–like his hard line on
privacy and focusing the app on the camera instead of a feed like
Spiegel offered his insights into the state of the business as
Snapchat released its
third-quarter report, in which the app showed 50 percent
year-over-year growth in revenue, mostly from ad sales. Snapchat
generated $446 million in the third quarter. Daily active users
also rose 13 percent year over year to 210 million people.
Snapchat celebrated its eighth year in business in September.
“Many of the choices we made when Bobby [co-founder Bobby Murphy]
and I were just getting started have created significant tailwinds
for our business today,” Spiegel
said in his written remarks ahead of an earnings call with Wall
Street analysts, “including our focus on privacy, ephemerality,
self-expression—and most importantly, our decision to open
Snapchat directly into the camera.”
Spiegel was referring to many of the core facets of Snapchat
that make the app unique, even if they were challenges for the
company when it was first starting out. Spiegel has made decisions
that prioritize privacy, which did make it more difficult to
develop ad targeting products for advertisers. Also, the ads and
other videos in the app are ephemeral, meaning they disappear
within 24 hours—a disappearing act that unnerved many
Lastly, Spiegel referred to the centrality of the camera, which
is the first screen people see when they open Snapchat, not a feed
of videos and images that could house more ads.
Snapchat posted a strong quarter, however, which signaled the
company was starting to find its footing. The growth in revenue was
the third quarter in a row that revenue growth accelerated.
However, Snapchat’s guidance for the fourth quarter
forecast that revenue growth could slow to between 38 percent to
44 percent compared to the fourth quarter of last year. Snapchat
forecast fourth-quarter revenue of between $540 million and $560
Snapchat’s stock sank nearly 5 percent in after-hours
The company highlighted business bright spots in its earnings
report, including the Discover media section, which hosts
ad-supported channels and shows from top publishing and
entertainment partners. Snapchat said that each of more than 100
Discover channels command audiences of more than 10 million people
Snapchat updated ad formats within the past quarter to
let advertisers run video ads of up to three minutes long, instead
of a 10-second limit. The ads are still skippable, but the change
was seen as a way to give advertisers a break. Instead of having to
cut video ads to fit Snapchat, they can employ the same ads they
Snapchat also launched a gaming platform this year, which is a
hub within the app that features mobile video games.
Jeremi Gorman, Snapchat’s chief business officer, said that
the ad sales team has completed a reorganization to focus on
industry verticals like entertainment, retail and travel,
replacing a regional sales structure.
“With our sales team set up for operational success, we will
now have the ability to be strategic in how we choose to prioritize
advertisers, on which verticals we focus and how we will drive
go-to-market strategies to improve advertiser demand,” Gorman
said in the earnings call remarks.
Source: FS – Advertising Blogs !
Snapchat CEO Evan Spiegel says early focus on privacy helped company