The Snapchat maker Snap Inc. is still expected to exponentially grow its ad revenue in 2017 — but not quite as much as originally expected.
The Snapchat maker Snap Inc. is still expected to exponentially grow its ad revenue in 2017, but not quite as much as originally expected.
A new report from eMarketer on Tuesday slashed Snap's projected ad revenue by $30 million, to $770 million from $800 million. The reason for the cut, according to eMarketer, is due to "higher-than-estimated" revenue sharing with publishing partners in Snapchat's Discover section.
Snap's stock has continued to fall since the company went public at $24.48 on March 2, with shares hitting their post-debut low at about $20.50 on Tuesday.
The company's publishing partners, which include the likes of BuzzFeed and Vice, produce original content for Snapchat every day in exchange for sharing revenue from ads placed with their content. In the paperwork for its initial public offering, Snap disclosed that it paid these publishers $58 million in 2016, up from $10 million in 2015.
While eMarketer's predictions would still mean a 158% increase in ad revenue for Snap, the research firm noted that "Snapchat's ad business, which is made up entirely of mobile display, is still small."
Snap is predicted to account for 1.3% of the US mobile ad market in 2017 and grow to 2.7% by 2019. By comparison, eMarketer expects Facebook to control 25% of the US mobile ad market this year, while Google is expected to wield 32%.
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