Snap is shifting its focus towards enhancing and diversifying its advertising division, which has been underperforming, with a particular emphasis on Augmented Reality (AR), as indicated by CEO Evan Spiegel in a message to employees on Tuesday.
This update arrives during a difficult stretch for the owner of Snapchat, as it competes for advertising dollars with major social media rivals like Meta Platforms, the parent company of Instagram, and TikTok, owned by Bytedance.
In his note, Spiegel addressed concerns regarding the company’s stock performance, stating, “You may be wondering why, with all of the progress we’ve made in our business over the last year, our share price performance has lagged the overall market. The answer is simple: our advertising business is growing slower than our competitors.”
Earlier this month, Snap provided a bleak outlook for the current financial quarter, attributing it to a decline in advertising expenditures. The company now anticipates a revenue of approximately $5.34 billion for fiscal year 2024, based on data from LSEG.
Throughout this year, Snap’s stock has plummeted by nearly 48 percent.
To bolster its market presence, the company plans to introduce new advertising placements that leverage Machine Learning (ML) and automation technologies.
Additionally, Snap is working on developing AR and smart glasses, similar to initiatives undertaken by its competitor Meta.
In the note, Spiegel highlighted, “We are investing in creating AR glasses that allow people to interact with computing, the world, and one another in totally new ways.”
Back in June, Snap unveiled generative AI tools designed to enable users to create more lifelike effects when filming themselves with their phone cameras.
© Thomson Reuters 2024
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