Snap's North America Advertising business is expected to contribute $1.04 billion to Snap's 2019 revenues, making up 60.7% of Snap's $1.71 billion in expected revenues for 2019. The North America advertising segment contribution is 1.5x than of International advertising segment revenue.The North America advertising segment will provide $675 million, that is 51.8% of $1.3 billion in total revenue the company is expected to add between 2016 to 2019.Despite North America Advertising revenue growth Snap has suffered from a drop in price since its listing in 2017. For more discussion regarding its current value please check our Snap's valuation analysis.Below we discuss Snap's business model, followed by sections that review of past performance and 2019 and 2020 expectations for Snap's revenue drivers and competitive comparisons of its Advertising revenue with Facebook and Twitter.
Snap's Business Model
What does Snap offer:
Snap Inc. is a camera company. Their flagship product, Snapchat, is a camera application that helps people communicate visually with friends and family through short videos and images called Snaps. The company's products are:Camera
: Helps offer a wide variety of creative tools, created by both the company and the community, to make it easy for people to personalize and add context to their Snaps.Friends Page
: This was the first version of the application i.e. a chat service Discover
: Discover helps surface the most interesting Stories and Shows from publishers, creators, and the community, based on a user’s subscriptions and interestsSnap Map
: Pulling down on the Camera screen brings you to a live map of your locationMemories
: Users can choose to save the Snaps they create in a searchable personal collection called Memories.Spectacles
: Spectacles connect seamlessly with Snapchat and capture video from a human perspective.
Has 3 major segments:Advertising Products
: The ad products are built on the same foundation as consumer products. Snap Ads let advertisers tell their stories the same way the users do, using full screen videos with sound. Snap Ads also allow advertisers to integrate additional experiences and actions directly within these ad units, including watching a long-form video, visiting a website, or installing an app.Campaign Management and Delivery
: The company is working to provide automated, sophisticated, and scalable ad buying and campaign management which would help advertisers increase their return on investment by providing more refined targeting, and the ability to test and learn with different creatives or campaign attributes in real time among other things.Measuring Advertising Effectiveness
: The company offers third-party and first-party solutions to provide analytics on campaign attributes like reach, frequency, demographics, and viewability; changes in perceptions like brand favorability or purchase intent; and lifts in actual behavior like purchases, foot traffic, app installs, and online purchases.
What Are The Alternatives?
Major competitors are Apple, Facebook (includes instagram and whatsapp), Twitter and Google.
What Is The Basis of Competition?
Competition depends on what a company can provide their users with, ranging from variety of products, services, content, and online advertising offerings. Competition would also come from traditional and online media businesses for advertising budgets. including social media.
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1. How to save your forecasts:
Click on the blue "Try Trefis" button in the header to create an account, then navigate back to this dashboard. Now, any changes you make to these inputs will be auto-saved as a scenario (see left panel of dashboard).
2. How to monitor your scenario vs. actual results
Once you've saved your forecast, you can "rename" your scenario by clicking on the gear icon next to the scenario (on the left panel). For more info, see this quick, 30-sec video (look at the 9 sec mark)
With your forecast saved and named, you can see how well you forecast the company's performance at the end of each period and compare your forecasts to hundreds of other Trefis users who came up with their own forecasts. Lastly, you can share with friends and colleagues to show them how you fared and compare your forecasts to theirs.