Snap Inc. goes public despite worries over fierce competition

snapchat-ad-deck

Source Snap Inc.

Following months of anticipation, Snap Inc. has filed to go public. The company that owns popular messaging app Snapchat made $404.5 million in revenue in 2016. That’s quite a jump from the $58.7 million it brought in the year before (2015).

Snap Inc. plans to raise $3 billion as part of its IPO which values the company at $25 billion.

The California-based app maker now has 158 million daily active users who create up to 2.5 billion snaps each day. The firm’s global average revenue per user is $1.05, according to the Securities Exchange Commission filing.

When compared to biggest rival Instagram, which reported 300 million daily active users last year, Snapchat still has some catching up to do. Indeed, ever since Instagram launched its Stories feature (which the company CEO admitted was a rip-off of Snapchat’s same-named feature), Snapchat Stories views declined 15-40% according to TechCrunch sources.

Nick Cicero, CEO of Delmondo, a creative analytics platform, said:

“Overall, from August to November 2016, the average unique viewers per Snapchat Story has decreased about 40%.”

Snapchat hopes that its video chat service alone can make up for the drop. After all, Stories is only one specific segment of the app. And let’s not forget that the average Snapchatter visits the app 18 times per day. Usage and app loyalty are increasingly important ways to measure app success and Snapchat is proving successful here.

As of right now, advertisers can use Snap Ads as well as more creative ad features such as Sponsored Lenses and Geofilters to reach audiences on the app.

In October 2016, it rolled out programmatic media buying via its ads API. Since then, the company has been attracting additional advertisers to its platform. The technology includes Custom Audience Match API, which lets marketers upload and target ads using their own CRM lists.

Only last week, Snap Inc. partnered with R/GA to roll out a sponsorship programme for innovative technology start-ups.

Despite lagging behind competitors such as Facebook and Google, Snap Inc. offers something that perhaps makes it a little more unique to some brands: a large, predominantly young audience and the creative tools to reach them.