EMarketer expects that Snapchat’s advertising revenue will increase by 24% to reach $832.1 million this year. The rise will be driven by the investment in the expanding and improvement of ad offerings including Stories ads and video ads.
The popular app will achieve its goal of $1 billion in net revenue from ads by 2020. EMarketer says it lowered the estimate two times because the company decided to sell ads programmatically hence driving the price down.
Previously, eMarketer reported that CPMs went down after Snapchat automated their selling tech.
Before rolling out programmatic, the company priced up to $750 000 per ad.
‘Programmatic buying has expanded the company’s reach to allow medium-sized businesses and small businesses to invest in ads at low prices. However, the move has also tempered with growth estimates,’ said the senior director for forecasting at eMarketer, Monica Peart.
Meanwhile, the app is facing stagnation in the growth of the number of users. On average, active users per day are still 184 million, as they were in the third quarter of 2018.
EMarketer is expecting that U.S users will drop by 2.8% in 2019. Worldwide use is expected to grow by 11%.