In what is already turning out to be a busy 2016 for the ephemeral messaging app, it is now predicting that it will generate revenue in the range of $300-350 million this year. That’s six to seven times higher than the $50 million projection it made in 2015, reports Recode.
At that same recent valuation, Snapchat managed to raise $175 million in funding through Fidelity Investments, hinting at the faith investors have in the firm’s solid growth. The company has now raised $1.4 billion in total. Not all bad news then.
Although Snapchat’s popularity among Millennials (and its alienation of older users) is a true but tired cliché, the app is proving itself to be much more than a simple messaging platform. Barely a week has gone by this year when Snapchat hasn’t announced a new promotional tie-in or feature. At its core, its expansion of Live Stories now encompasses everything from sports to politics.
It is all part of Snapchat’s larger monetization strategy, which is reliant upon advertisers and publishers (the latter through its third-party Discovery channels). In the past, the company seemed content to push through in-app purchases for its users (such as selfie lenses), but it is increasingly ditching those plans to focus on the big bucks that come with larger corporate tie-ins.
Meanwhile, the content Snapchat offers is also changing. A number of recent updates have hinted at more original visual content making it on to the app as it seeks to become a mobile storytelling service. Consequently its vertical video format has been utilized by its own reporters at major events, from the election campaign trail to the Oscars.
That doesn’t mean Snapchat will stop selling you things. In fact, a prominent future update intends to do just that by introducing an e-retailing function through the Discovery tab. Although it has yet to reveal its exact advertising revenue numbers, the sheer versatility (and continual growth) it has shown is likely to boost its revenue. Put the silly selfies away folks, its time everyone began taking Snapchat a lot more seriously.
