Snap Inc (SNAP) will be the ad-based business champion among all the social media giants
Snap Inc has seen it’s best day in the market Tuesday due to growing ad revenue in recent weeks, even as companies slow down spending on ads across all other media platforms. The company’s revenue for last quarter mainly came from advertising, earned a whopping $462 million, up more than 44% from the $320 million the company reported in the first quarter of 2019. Most analyst believe that though Snap will be a champion recovering from COVID-19, most ad-based business will become losers. For example, Twitter pulled its first-quarter guidance in March, due to an impact to ad spend despite a jump in user engagement.
Snap’s resistance to the COVID-19 down-turn could be due to it’s different marketing tactic. Snap relies on big companies that pay more, rather than Twitter and Facebook’s method of millions of small companies that pay less. As the small companies that generate revenue for Facebook, Twitter and Google slow spending to weather the pandemic, Large companies that generate most of Snap’s revenue have a little more cash in hand to continue spending on advertisements.
LightShed analysts noted Tuesday that Snap appears to be “far better positioned than its peers to withstand the challenges ahead.” They said the platform likely has “maybe a couple hundred thousand” small-business advertisers, versus the more than 8 million at Facebook and Instagram. It also has less exposure to travel and leisure categories compared with Google and Facebook, they wrote. Analysts argued the platform is also less tied to marquee events and brand buys that are a “core focus at platforms such as Twitter.”
About Snap Inc
Snap Inc. operates as a camera company in the United States and internationally. The company offers Snapchat, a camera application that helps people to communicate through short videos and images. It also provides Camera, a tool to personalize and add context to Snaps; Friends Page that allows creating and watching stories, chatting with groups, making voice and video calls, and communicating through a range of contextual stickers and Bitmojis; and Discover that helps surfacing the stories and shows from publishers, creators, and the community, based on a user’s subscriptions and interests. In addition, the company offers Snap Map, which brings to a live map of individual location, showing nearby friends, popular stories, and a heat map of recent snaps posted; Memories that allows users to choose to save the Snaps they create in a searchable personal collection, and users to create Snaps and stories from their saved Snaps and camera roll; and Spectacles, a hardware product that connects with Snapchat and captures video from a human perspective. The company was formerly known as Snapchat, Inc. and changed its name to Snap Inc. in September 2016. Snap Inc. was founded in 2010 and is headquartered in Santa Monica, California.