Snap’s CEO, Evan Spiegel, announced to employees on Tuesday that the company is shifting its focus towards expanding its advertising business, particularly with an emphasis on augmented reality (AR).
This move comes as Snapchat faces tough competition for ad revenue from popular platforms like TikTok, owned by ByteDance, and Meta’s Instagram.
“Even though we made significant progress last year, you might be wondering why our stock performance hasn’t kept up with the broader market. The straightforward explanation is that our advertising business is expanding at a slower pace than that of our competitors,” Spiegel noted in the memo.
In early August, Snap revised its financial outlook for the current quarter, citing a dip in advertising spend. As per LSEG data, the company has revised its revenue forecast for 2024 down to $5.34 billion.
This year, Snap’s stock has experienced a significant drop, plummeting over 48%.
In response, Snap has revamped its approach, offering new ad placements and leveraging machine learning and automation to enhance its advertising model.
Similar to Meta, Snap is also investing in smart glasses and augmented reality technology. “We remain committed to developing AR glasses that will allow people to interact with computers, the world, and each other in entirely new ways,” Spiegel added.
In June, Snap launched a generative AI tool that lets users apply more realistic effects to their photos using their phone cameras.
(© Thomson Reuters 2024. NDTV staff has not edited this story, it was auto-generated from a syndicated source.)
