The Gen Z favorite social network is reportedly struggling to find cash. While its losses rose to $249 million in the second quarter—down from $377 million a year earlier—the results for the current period are less encouraging. As of August 1, Snap Group lost more than 17% during electronic trading after the New York Stock Exchange closes. Yet it is not for lack of popularity: 432 million users use the ghost app daily, and 850 million use it at least once a month.
Figures beyond expectations, but which do not convince advertisers and advertisers: “Snap does not seem to be able to maintain the favor of investors for long,” notes Jasmine Enberg, from the market research company Emarketer. A constant for the Snap group, which, since its creation in 2011, has never managed to generate an annual profit via advertising, unlike Meta (Facebook, Instagram, WhatsApp).
Advertisers’ disinterest
Yet Snapchat has recently made some compelling choices. Its Snapchat + offering, a paid subscription adding AI features, has gained 4 million subscribers since the end of 2023, to reach 11 million in total. But Jasmine Enberg notes a glaring lack of interest from advertisers: “Despite strong growth in the number of Snapchat + subscribers, investors have not been satisfied with the weaker growth in its core business, advertising, particularly given the impressive growth in the number of active advertisers.” This is not very reassuring for the group, which has been making layoffs left, right and centre for the past two years: in February, the group laid off 10% of its employees (around 500 people). It had already laid off 20% of its staff in the summer of 2022, or more than 1,200 people. It seems that the company is increasingly resembling the little ghost that has become its emblem.
