3/10/2023 0 Comments Decelerate braket![]() If there is a decreased emphasis on new product development and rollout, one of those key attributes that helped them build advertiser continuity is lost,” said Alex Stone, SVP of advanced video and agency partnerships at Horizon Media. “Snap has always been creative in their approach to building relationships with advertisers and agency partners, rewarding advertisers through production and media credits for their investment and willingness to try new products. Some ad buyers are concerned that without Gorman and Naylor, Snap’s relationships with advertisers and appetite for innovation will suffer. ![]() "Snap’s recent departures highlight the fact that they are struggling and will cause some brands to think twice before investing,” said Danielle Wiley, CEO of influencer marketing agency Sway Group. Negative sentiment about Snap has risen 48% over the last month, according to YouGov Signal, which doesn’t bode well for its ad business. The reasons are two-fold: advertisers want stable investments and trusted metrics, and they don’t want to be associated with brand safety risks. Advertisers often pause or pull back spend during times of significant platform upheaval, as was witnessed during Twitter’s second quarter when ad revenue growth slowed to just 2%. Turbulence could hurt Snap’s ad business in the short-term. Snap handed oversight of ad products and sales to Jerry Hunter, who was named chief operating officer. The company said the cuts could save it $500 million in costs annually.Īmidst the layoffs, Snap was dealt another blow last week as its top advertising executives Jeremi Gorman and Peter Naylor were hired by streaming giant Netflix. Canned projects include its recently-launched Pixy drone and Zenly, a social app it acquired in 2017. He unveiled plans to focus on community and revenue growth and augmented reality as the company looks to “ discontinue or substantially reduce investment” in other projects. At the time, he said the business was planning to reduce operating expenses by slowing hiring.īut in a note to employees last week, Spiegel said “we must now face the consequences of our lower revenue growth and adapt to the market environment.” Snap CFO Derek Anderson told investors in July the business had observed “a fairly steady deceleration” in advertising demand over the last year. ![]() It posted 13% year-over-year revenue growth in Q2 and said last week it is tracking at 8% growth, which CEO Evan Spiegel said is “well below what we were expecting.” Snap has lost nearly 80% of its stock value since the beginning of the year. The layoffs come as Snap’s growth rate has fallen significantly in recent quarters from triple-digits in 2021. The parent company of Snapchat last week slashed 20% of its global headcount, roughly 1,300 people, as part of a “reprioritization process” to avoid ongoing losses. Snap is undergoing a sweeping reorganization as it attempts to stabilize following several quarters of slowing growth.
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