Advertisers to embrace Snapchat, says report

London - Anyone doubting the power of Snapchat will be in for a surprise. The multimedia mobile application is expected to reach one billion dollars in advertising revenue by next year, and doubled by 2018, according to digital research company eMarketer.

Analyst Cathy Boyle said in a research note that advertisers are attracted to Snapchat’s “broad reach” among both younger millennials and those in Generation Z, which she called “valuable demographic groups” for marketers.

Boyle noted that Snapchat has expanded its advertising portfolio to include a broader array of video ads, as well as more sponsored geo-filters and sponsored lenses.

In the five years since Snapchat launched, the app has amassed a large and active user base. eMarketer projects 58.6 million US consumers will use Snapchat at least once per month in 2016. eMarketer’s user estimate would represent 28.3 percent of US smartphone users and 18.1 percent of the US population.

What is anticipated to change significantly is the size of the Snapchat audience. eMarketer projects two more years of double-digit growth in the number of monthly active users—a 27.2 percent year-over-year increase this year, followed by a 13.6 percent increase next year.

Millernials are the largest users of Snapchat

Millennials make up the largest share of Snapchat’s US user base, totaling 40.9 million and representing 70 percent of Snapchat’s monthly active users in 2016, according to eMarketer’s estimates.

Snapchat currently derives 95 percent of its advertising revenue from the U.S., but eMarketer says its non-U.S. share of revenues will grow as it begins to monetize users in countries where it has a substantial user base, most notably the United Kingdom. A quarter of Snapchat’s ad revenues are expected to come from outside the U.S. by 2018.

Burberry became the first luxury brand to have a Snapchat channel

Snapchat’s advertising options, all of which are pay per view, include live stories, placement within media Discover channels and lenses. Burberry became the first luxury label to have a branded channel in Discover, using the placement to promote its Mr. Burberry cologne release.

eMarketer is is one of the most widely cited research providers in the media, and provides information in the world of digital marketing, media and commerce.

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