Snap, Inc. reported healthy ad revenue growth for the second quarter, placing a strong emphasis on programmatic ad marketplace while continuing to underplay backlash over its app redesign.
Despite an overall loss of $353 million, Snapchat parent company Snap, Inc. earned $262 million in Q2 2018—an increase of 44 percent compared to the same quarter last year. Three-quarters of that revenue was attributed to programmatic ad buying, the company boasted.
Once again, the subject of Snapchat’s unpopular redesign was broached, but the company doesn’t appear concerned. In fact, despite GDPR and user backlash, the app increased global DAU by eight percent YoY and only lost one percent each in North America and Europe compared to Q1.
CEO and co-founder Evan Spiegel reminded investors that they are building a new Android app from the ground up, which has recently entered a testing phase. Reconnecting with Android users will be a “higher focus” for the company, Spiegel explained, admitting that they will continue to change the design based on user feedback.
The company has been rather busy this past quarter bulking up its advertising marketplace which appears to have paid off. Despite a lower user base, Snap managed to increase its average revenue per user (ARPU) to $1.40 in Q2.
Programmatic advertising revenue is up 485 percent YoY, the company told investors. Q2 marked the debut of Snap Kit, a suite of tools that allows brands to integrate Snapchat logins, Bitmoji integration and Lens Explorer. Story Ads, Lenses and Filters are now available programmatically, as well.
The app faces mounting competition from the likes of Instagram, Facebook and—more recently, YouTube—as Snapchat’s own Stories feature is copied time and again. Instead of panicking, Snap, Inc. has focused on long-term growth.
In addition to beefing up its advertising marketplace, Snap, Inc. is fostering influencer talent. The brand recently announced its Yellow incubator program and just last week began testing “Storyteller” ads that promote popular creators across Discovery and Stories sections.