Snapchat on Ascendency as Twitter Decline Continues
Snapchat is projected to produce $366.69 million in global ad revenues by the end of 2016—a 519% change compared to last year—and $935.46 million in 2017, according to new data from market research firm eMarketer.
At this time, nearly all (95%) of Snapchat's ad revenue comes from the U.S. However, eMarketer forecasts that this will change as the photo- and video-sharing network monetizes its user base in other countries, like those in the U.K. In fact, the research firm predicts that the U.S. will account for only 75% of Snapchat's global ad revenue in 2018.
Discover—a feature that allows people to browse channels from various publishers—currently serves as Snapchat's main money maker in the U.S.— accounting for 43% of its ad revenue. Although, eMarketer suspects that Stories—a feature that shows a series of images or videos in chronological order—will surpass Discover as the primary ad revenue stream next year and produce 37.8% of its U.S. business.
Snapchat is also set to introduce new advertising features. Business Insider recently reported that Snapchat's Director of Revenue Operations Clement Xue disclosed in another eMarketer report that the company intends to debut behavioral targeting capabilities in Q3 2016.
Although Snapchat launched its ad platform in 2015, it hasn't been able to fully prove its monetary worth. Consider: The application attracts 31.6% of social media users in the U.S, according to eMarketer's figures; yet it secures just 2.3% of social media ad dollars.
Interestingly enough, eMarketer's report comes three weeks after it released data regarding American's declining Twitter usage. On August 15, the research firm backpedaled on a prediction that it made in February stating that there would be an 8% year-over-year increase in the number of U.S. Twitter users who access their account once a month or more. Its most recent figures suggest that Twitter will experience just a 2% boost—bringing its projected number of active U.S. users to 52.2 million. About a week later eMarketer revealed that Snapchat is expected to have 58.6 million active U.S. users by the end of this year.
Actually, eMarketer expects Twitter's growth to be fairly flat over the next four years. The research firm now anticipates Twitter winning over 3.6 million users by 2020 instead of 13.9 million as it had originally predicted. For comparison, it expects Facebook to secure 15.2 million U.S. users over this time frame.
eMarketer also reports that Twitter will obtain a 28.1% share of U.S. social media users—a decline compared to last year.