Snapchat ad revenue could hit $1bn by 2017 according to eMarketer

eMarketer says Snapchat could rake in $1bn by 2017

Snapchat could pull in as much $1bn in ad revenue by the end of 2017 – almost tripling what is it is projected to generate in the most recent financial year, according to a report from eMarketer.

The figures from the market research company have predicted that the messaging app will generate $366.69m in ad revenues this year, with that figure poised to leap to $935.46m in 2017.

The $1bn number lines up with details found in leaked Snapchat documents that Tech Crunch got its hands on earlier this year. Data from the pitch deck containing company forecasts revealed that while the messaging app had brought in $59m in revenue in 2015, it was aiming to clock up between $300m and $350 in revenue in 2016. Snapchat hasn't commented on the figures but they have been widely reported.

The eMarketer forecast follows on from the messaging app's recent advertiser-friendly overhaul, which saw it roll out an API to open up to third-party advertisers, ink a slew of ad tech and creative partnerships, and streamline its ad formats.

Snapchat's 'Discover' feature for publishers currently generates the largest share of revenue in the US (its biggest market) said eMarketer, but the startup's renewed focus on advertising will see this trend shift, with the video ads shown between 'Stories' poised to become its dominant ad revenue source.

BuzzFeed, Refinery 29 and the Daily Mail are among the titles currently making use of Snapchat Discover, and 43 per cent of the app's ad revenues in the States come from campaigns served inbetween articles within Snapchat's walls. However, ads shown in the Stories section of the app will generate more cash for the company by the end of 2017, pulling in 37.8 per cent of its ad income.

The report states that at the moment Snapchat derives 95 per cent of its revenue streams from the US, but pointed out that by 2018 a quarter of its ad revenue will come from outwith the US as it continues to monetize in other countries like the UK.

"Advertisers are attracted to Snapchat for its broad reach among young millennials and those in Generation Z, which are valuable demographic groups for many businesses,” said eMarketer principal analyst Cathy Boyle.

"To engage those often hard-to-reach consumers, Snapchat has expanded its advertising portfolio over the past year to include a wider array of video ads, and more sponsored 'Geofilters' and sponsored 'Lenses'."

In a previous report, eMarketer has forcasted that the app's popularity will spread beyond millennials and teens, and predicted two more years of double-digit precentage growth in terms of its monthly active users (MAUs).

Get the Newsletter

Keep up to date with the latest news and insights.

Subscribe

Rebecca Stewart

Rebecca Stewart is a reporter at The Drum. She primarily writes news, analysis and features around brand marketing and digital innovation. She has interviewed key figures from the likes of Airbnb, Amnesty International, Unilever, Facebook and Spotify, as well as covering international events like Ad Week Europe, Dmexco and Ciclope.

All by Rebecca