Snapchat’s Stock Dips As It Struggles To Attract Advertisers To Its App


Snapchat’s parent company, Snap Inc., dipped five percent in trading on Thursday, June 8. This caused Snap shares to its initial public offering price of $17 a share for the first time since the company went public back in March. Also, Snapchat CEO Evan Spiegel’s net worth has gone down to $3.9 billion, according to a Bloomberg report. Spiegel basically became a millionaire for launching the image and video messaging app. His net worth has been tied to his stock holdings with the company.

The decline has to do with the company’s inability to win over new users. It’s also having a hard time keeping its regular users thanks to the latest boom of Facebook Stories and Instagram Stories. Snapchat unveiled that user growth has stalled, while its revenue has fallen short of its expectations. It’s also not helping that Snapchat is having a hard time gravitating marketers and advertisers to its app.

Seven percent of marketers said they used Snapchat in the first quarter of 2017, according to a Social Media Examiner survey by Statista. That leaves Snapchat behind Facebook, which also owns Instagram. Even Pinterest and Twitter are also ahead of Snapchat when it comes to attracting marketers, reports the Business Insider.

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Snapchat has been trying to attract advertisers with its new self-serve tools and certified partners, according to TechCrunch. Trust is an important component in business. Snapchat wants to attract advertisers to buy and create campaigns with utmost confidence.

Snap Inc. needs to attract advertisers after its reported first earnings last month where it revealed $149.6 million in revenue compared to the $158 million anticipated earnings. Losses have also amounted to $2.22 billion in quarter one, up from $104 million the previous year. The signs aren’t looking good for Snap, even with the $2 billion in stock compensation the company paid out.

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The company is struggling to get its company growing. It doesn’t help that the mobile app is mostly used by teenagers and young adults. Facebook has started competing for the Stories format on both Instagram and Facebook itself, which attracts Millennials and Baby Boomers.

In July, advertisers will use the Snap Publisher which cuts horizontal videos into vertical videos. Meanwhile, Snapchat’s Ads API will allow tech companies to buy tools for optimizing ads on Snapchat. This copies Facebook’s partner certification programs such as the Strategic Preferred Marketing Developer distinction. In the meantime, Snapchat wants to expand its partner program by adding 25 new partners like Booyah Advertising, Resolution Media, and PMG Worldwide.

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