Snap's stronger-than-expected Q1 shows how it's revved up a critical part of its business even though user growth is stuck in the mud (SNAP)

evan spiegel

  • Snap impressed Wall Street with its first-quarter earnings, bringing in $320 million of revenue as opposed to consensus estimates of $307.4 million.
  • The ad-sales-intelligence platform MediaRadar tracked ads on Snapchat in the quarter, breaking down buying patterns, size of ad buys, and product categories.
  • Fifty-eight percent of Snap's 2019 first-quarter advertisers are renewing their spend, signaling long-term adoption. This is welcome news for Snap, which has long been considered an experimental buy.
  • Snap also seems to be broadening its advertiser base, attracting more new advertisers than before, with MediaRadar estimating that 42% of its first-quarter advertisers are entirely new to the platform.
  • Visit Business Insider's homepage for more stories.

With revenues of $320 million beating consensus estimates of $307.4 million, Snap surpassed analyst expectations  in the first quarter of 2019 — briefly sending its stock soaring.

Read more: Snap beat Wall Street's expectations for Q1 2019 but its user growth is still stalled

Evan Spiegel, Snap's CEO and cofounder, also touted the company's reach with young people during the earnings call, saying that Snap has now reached 75% of all 13- to 34-year-olds in the US.

Snap's user growth remained stalled in the first quarter, highlighting one of the top problems that Spiegel needs to fix as he tries win back investors' trust. 

But when it comes to Snap's relationship with advertisers, its first-quarter report card is the latest of numerous encouraging signs, according to the ad-sales-intelligence platform MediaRadar.

MediaRadar analyzed buying patterns, size of ad buys, and product categories on Snap during the quarter.

Among its key findings: 

  • The number of brands placing ads on premium Snapchat Discover channels is up 15% year-over-year this quarter.
  • 58% of first-quarter advertisers are renewing their spend, signaling long-term adoption.
  •  42% of first-quarter advertisers are entirely new to the platform.
  • Brands in the media, entertainment, tech, retail, and apparel categories spend the most.
  • The platform's  top 10 advertisers continue to increase their investment.
  • More than 200 brands ran a one-day campaign on Snapchat in the first quarter of 2019.

"The company has a healthy mix of both new and returning clients, and the loyalty of major advertisers like Comcast, Adidas, and Disney," MediaRadar CEO Todd Krizelman said.

Snap finally seems to be becoming a permanent fixture in brands' media buys

One of Snap's biggest hurdles has been that advertisers have long considered it to be a part of their experimental bucket, rather than a must-buy. But that seems to be changing, according to data crunched by MediaRadar.

Fifty-eight percent of advertisers who spent on Snapchat in the first quarter of 2019 are renewing their spend, which indicates that Snapchat is increasingly becoming a part of the recurring spend consideration set. This is a marked improvement from 2018, when only 17% of the advertisers spent on the platform for more than two quarters.

The growth in recurring advertisers can be attributed to the company's shift to programmatic starting to stabilize, as well as investments Snap has made to improve its ads manager, with advanced features such as target-cost bidding and new bulk-uploading capabilities. The fact that Snap now allows advertisers to optimize against important brand goals such as efficient reach and targeting is also drawing in more brand buyers.

"Snap is reducing the friction, making it easier to place ads and also introducing new functionality to target audiences," Krizelman said. "Our numbers show these efforts are paying off."

Snap also seems to be broadening its advertiser base, with MediaRadar estimating that 42% of its first-quarter advertisers are entirely new to the platform. This could be the result of more flexibility, as the platform has started to allow for one-day buys (the previous minimum was three). By reducing the hurdles to buy, Snap is giving advertisers more choice — and hence attracting more brands. 

"These shorter buys allow advertisers to advertise at very specific moments if they want to, and the early results are that advertisers are interested," Krizelman said. "In Q1, we saw over 200 brands run a one-day campaign, including brands like Reebok, Monster.com and Dunkin."

Expect that number to swell more, with Jeremi Gorman, Snap's chief business officer, installing a whole new "Scaled Services" sales team focused on bringing more advertisers to the platform.

SEE ALSO: Snap beat Wall Street's expectations for Q1 2019, but its user growth is still stalled

Join the conversation about this story »

NOW WATCH: The Karlmann King is a $2 million enormous ultra-luxury SUV built upon a Ford F-550



Contributer : Tech Insider http://bit.ly/2voZ5z7
Snap's stronger-than-expected Q1 shows how it's revved up a critical part of its business even though user growth is stuck in the mud (SNAP) Snap's stronger-than-expected Q1 shows how it's revved up a critical part of its business even though user growth is stuck in the mud (SNAP) Reviewed by mimisabreena on Wednesday, April 24, 2019 Rating: 5

No comments:

Sponsor

Powered by Blogger.