eMarketer cuts Snapchat's projected revenue for 2017 by $128 million (SNAP)

FILE PHOTO -- A billboard displays the logo of Snapchat above Times Square in New York March 12, 2015. REUTERS/Lucas Jackson/File Photo

Snapchat parent Snap Inc. is expected to make $127.5 million less ad revenue this year than previously forecasted, eMarketer said on Monday.

The advertising research firm lowered its 2017 US ad revenue forecast for Snap from $770 million to $642.5 million, citing that Snapchat still "remains in the experimental bucket for many marketers."

The adjustment marks the second time eMarketer has slashed its revenue expectations for Snap this year; the firm's original 2017 US ad forecast of $800 million was lowered by $30 million in March due to higher than expected revenue sharing with publishing partners.

Now eMarketer expects Snap to make $774.1 million in worldwide ad revenue for 2017, down from its $900 million estimate earlier this year.

The report echoes some Wall Street analysts who have recently lowered their price targets on Snap's stock. JP Morgan’s Doug Anmuth cut his price target by $2 last week after observing the company's rollout of self-serve ads.

eMarketer still expects strong growth from Snap over the next couple of years, with 2018 US ad revenue projected to overtake Twitter at $1.18 billion.

But Snap is still feeling pressure from Facebook's Instagram, which eMarketer expects to reach $3 billion in US ad revenue this year and $6.84 billion in 2019. Instagram recently crossed 500 million daily users, nearly triple Snapchat's 173 million.

The firm notes that although Snap has been aggressive in building out its two-year-old ad business, experimental ad products like sponsored 3D World Lenses have yet to convince marketers to fully jump on board.

(Disclosure: eMarketer and Business Insider are both owned by Axel Springer.)

Join the conversation about this story »

NOW WATCH: RICH GREENFIELD: There is just one way for Snapchat to survive Facebook