Snapchat will focus on expanding and diversifying its underperforming advertising business, focusing on augmented reality, Reuters reported on Wednesday.
Reuters reported that Snapchat CEO Evan Spiegel made the announcement at a difficult time. The company is competing with major social media players such as Instagram, its parent company. Goal Platforms and Bytedance tiktok for advertising revenue.
“You may be wondering why, despite all the progress we’ve made in our business over the past year, our share price performance has lagged the broader market. The answer is simple: our advertising business is growing more slowly than our competitors’,” the report said, citing a note from the CEO.
Earlier in August, Snapchat was estimated to have a weak outlook for the current quarter due to a decline in advertising spending. The report, citing data from LSEG, now estimates that Snapchat will report revenue of $5.34 billion in fiscal year 2024.
The company’s shares have fallen about 48 percent so far this year, according to the report.
The CEO said the company plans to experiment with two new formats: ads in the chat inbox and in Snap’s maps feature. According to a Bloomberg report, this is the first time Snapchat has tried to monetize its popular maps feature, which allows users to see the location of their friends in real time.
Snapchat to revamp its marketing strategy
He Reuters According to the report, Snapchat is also planning to revamp its marketing strategy by introducing new ad placements powered by machine learning and automation. Like its competitor, Meta, Snapchat will also be developing augmented reality and smart glasses.
“We are investing in the creation of augmented reality glasses that enable people to interact with computing, the world and each other in entirely new ways,” the CEO’s note quotes the report as saying.
In June, Snapchat launched generative artificial intelligence tools that allow users to apply more realistic effects when using their phone cameras to film themselves.
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