The social darling is shooting for a March offering, The Wall Street Journal reports, citing sources. A company representative declined to comment on the report, on Thursday.
Standing in stark contrast to struggling social networks like Twitter, Snapchat is presently making more money than it can count.
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Indeed, despite direct competition from Facebook and other tech giants, the company is positioned for “explosive” growth in ad revenue over the next few years, according to a recent forecast from eMarketer.
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The research predicts that the playful messaging app will generate $366.69 million in ad revenues this year.
That figure is expected to jump to $935.46 million, next year.
Cathy Boyle, principal analyst at eMarketer, recently said Snapchat’s bright outlook has everything to do with its young user base. Boyl notes in a report.
“Advertisers are attracted to Snapchat for its broad reach among young Millennials and those in Generation Z, which are valuable demographic groups for many businesses.”
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To its credit, Snapchat has also tailored its ad strategy specifically for this easy-to-alienate demographic.
According to Boyle.
“To engage those often hard-to-reach consumers, Snapchat has expanded its advertising portfolio over the past year to include a wider array of video ads and more sponsored geo-filters and sponsored lenses.”
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Stateside, Snapchat’s Discover feature generates 43% of ad revenue, which is its largest single share, according to eMarketer.
Next year, however, the research firm expects Stories to overtakes Discover as the dominant ad revenue source -- by generating 37.8% of the company’s domestic ad revenue.
Having launched its ad platform in mid-2015, Snapchat still only captures 2.3% of social-networking dollars, eMarketer estimates. That’s despite the fact that it now commands 36% of the market in terms of domestic users.
Approaching its would-be IPO, Snapchat continues to experiment with new categories.
Bounding into hardware and physical fashion, the company recently unveiled Spectacles -- stylish video-recording sunglasses that are expected to retail for $130.
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Set to hit shelves later this fall, the shades can record 10-second video snippets, which are designed to approximate one’s natural field of vision. That's thanks to a 115-degree lens, which records circular video. If Spectacles are well received, Snapchat would become the first company to convince consumers to wear connected gadgets on their face.
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Google notoriously spent millions of dollars in development and marketing dollars, before giving up on its Glass initiative. Yet Snapchat -- which just rebranded itself as Snap, Inc. -- seems to have learned a few things from Google's failure.
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Spectacles’ $130 price tag is far more reasonable than the $1,500 that Google tried to charge people for Glass. Snapchat’s glasses are also being sold as a single-purpose device, which is historically much easier to market.
like Google, Snapchat currently enjoys a strong bond with young consumers -- the ideal demographic for starting trends and popularizing products.
Although bold, Snapchat’s move into hardware should not come as a complete surprise to industry watchers. The social darling recently joined the industry group that runs the Bluetooth wireless standard, which followed several hires and smallish acquisitions in the arena of consumer electronics.
COMMENTARY: I have to confess that I have not followed or even taken the time to use and evaluate Snapchat because I am most definitely not in their demographics. The idea of posting photos that dematerialize is something that just does not interest me. I ask the question: Why do I need this? I could not bring myself to come to a practical answer. On the other hand, I wasn't in Facebook's demographics either, but now everybody seems to be using the social giant site to connect and engage with users throughout the world.
Now comes the news that Snapchat is coming out with Spectacles, their first foray into cnsumer electronics. Didn't Snapchat's founders realize how intrusive taking someone else's picture without their permission can be? Google found this out when they introduced Google Glass, their augmented reality glasses. The cost for a pair of Google Glass was also prohibitively expensive. Maybe Snapchat will have better luck. Millennials are pretty impulsive, and love trying the latest in consumer electronics devices. They make the lions share of early adopters. The price is just right for Millennials, who are strapped for cash and carry a lot of debt, mostly from student loans. The glasses look "retro cool," but they don't rock my world from a designer standpoint. On the other hand, Spectacles differentiate the company from Instagram and Twitter's Vine and Periscope which also allow users to exchange video content via mobile devices. However, it still comes down to a sustainable business model, and Snapchat only began running ads in mid-2015. In my opinion, this is not a very long time to prove the sustainability of their business model.
The big news of the day is that Snapchat is planning a $25 billion IPO. I smell another Twitter IPO in the making. A startup that just began making money from ads in md-2015 is not reliable proof of a sustainable business model. Snapchat relies exclusively on Millennials, and that market although large, and soon to be the largest demographic segment in the US, is not broad or mainstream like Twitter or Facebook. Another question: How profitable is Snapchat? If they are anything like Twitter at this stage of their development, they are probably not profitable. Both Twitter and LinkedIn (recently acquired by Microsoft) were never profitable, so I would be very cautious about investing in a startup with such a narrow demographic focus.
I am dying to review Snapchat's S-1 filing. It should help answer a lot of investor concerns, and validate my own suspicions and doubts.
Courtesy of an article dated October 6, 2016 appearing in Social Media Marketing Daily, and an article dated June 6, 2016 appearing in AdvertisingAge, and an article dated September 6, 2016 appearing in AdWeek, and an article dated September 24, 2016 appearing in The Verge, and an article dated October 10, 2016 appearing in Profit Confidential
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