Snapchat | April 26, 2021
Advertisers are increasing their spending on Snap as the world reopens.
Snap reported US$770 million in Q1 revenue on Thursday, a 66% growth year on year, as the number of advertisers it deals with nearly doubled.
Snap's ad business is expanding in all ways. Direct response ads currently account for more than half of the platform's revenue. Snap, on the other hand, tripled the number of upfront commitments it got from brands this year compared to 2020.
Over the same time frame, Snaps' user base rose by 22% to 280 million, while average revenue per user increased by 36% to $2.74 year over year.
Since the majority of Snap's users use Android smartphones, insulating it somewhat from upcoming tracking changes on Apple’s iOS 14.5.
Advertisers are increasing their spending on Snap as the world recovers from the pandemic and the ad economy heats up again.
Snap, which has been beefing up its direct response and e-commerce capability, is seeing travel and leisure advertisers, which have been hard hit by the pandemic, rebound “with a fury,” according to chief business officer Jeremi Gorman, highlighting the company's March acquisition of AR e-commerce platform Fit Analytics.
Ecommerce, CPG, technology, streaming, online education, and telco brands are all showing interest in the platform.
“We are seeing the return of some previously powerful categories, such as theatrical and movies,”she said.
Snap is prioritizing augmented reality, partnering with brands such as Sweat, Gucci, The North Face, and American Eagle on branded lenses this quarter. In Q1, almost half (40%) of Snap users used filters regularly, with more than half of them being branded.
“Augmented reality is one of our most exciting challenges as we look forward, and we are investing heavily in both core technology and community-facing AR apps on our service,” Evan Spiegel, co-founder and CEO of Snap, said during the earnings call.
Snap also introduced a TikTok-rival update, Spotlight, in Q4, which was used by more than 125 million people in Q1. India, Mexico, and Brazil are now among the countries that have access to this feature.
The IDFA to drop
Snap is still unsure how Apple's App Tracking Transparency changes, which are set to take place on Monday, would affect its business. However, the company expects to grow by 80% in the second quarter.
“It is not yet clear what the longer-term effect of the iOS platform updates might be on the topline momentum of the business,” said chief financial officer Derek Anderson.
According to Spiegel, Apple's decision to delay the updates until April has given Snap time to implement SKAdNetwork, Apple's solution for measuring user activity across its applications, which it is testing with partners along with other "privacy-centric" solutions.
AD TECH AND MARTECH
Crunchbase | June 11, 2021
Apple’s recent privacy changes will not spell the end for adtech companies, but will force companies in the industry to rely on new tech and innovation as users demand more privacy.
The changes — as many people have seen on the commercials and the pop ups on their phones — went into effect less than two months ago and allow users to opt out of ID for Advertisers, or IDFA as they are commonly called. Those IDFAs allow advertisers to track iOS users’ activity across apps to better target ads and measure the effectiveness of their campaigns.
Those new rules also do not appear to be going away. Earlier this week during its annual Worldwide Developers Conference, Apple said its upcoming iOS 15 update will give iPhone users even more control over their privacy and see more detail about where their data is going. Users of the new iOS will be able to see who their apps are sharing data with and keep internet activity more private.
Those enhancements to user privacy will affect an advertising market that saw more than $2.7 billion in venture invested globally in it last year and is already at $3.2 billion this year, according to Crunchbase numbers. Mobile advertising specifically only makes up a small fraction of those dollars — with about $278 million in venture coming in last year.
“Apple’s moves should send a signal to startups that they should take privacy issues seriously at an early stage,” said Christine Tsai, CEO and founding partner at 500 Startups and an investor in adtech.
“They’re less costly to implement while companies are still young, which is what we’re encouraging our startups to do as part of our (environmental, social and governance) initiative,” said Tsai, who was part of the original technical support team that helped launch Google AdSense.
ADVERTISER CAMPAIGN MANAGEMENT
Sila | February 24, 2022
Sila Inc., a fintech software platform that provides payment infrastructure as a service, today announced that it partnered with dash.fi, a vertical fintech company serving the multi-million digital advertising industry, to create the first charge card purpose-built for advertisers. Close to $500 billion dollars are currently spent on digital ads globally every year. That number grew by 30% in 2020 and 25% in 2021. In partnering with Sila’s payment technology, dash.fi has designed its next-day-settle charge card to meet the specific operational and liquidity needs of e-commerce merchants that spend millions on marketing.
Traditional banks and credit card providers can’t meet the needs of eCommerce brands because their legacy credit card products don’t provide flexibility in underwriting, spending limits, or the transparency that growing eCommerce brands require to successfully scale their businesses. dash.fi’s 10x revenue growth in 2021 is evidence that this underserved segment of the credit card market is a massive market opportunity waiting to be captured.
dash.fi and Sila have partnered to solve complex payment-related problems for advertisers with a charge card that addresses:
Seasonal fluctuations in ad spend experienced by eCommerce brands
Daily surge spending that takes place during peak spend days like Presidents Day, Black Friday or Prime Day
The global, multi-platform nature of the digital advertising market that puts tremendous pressure on existing payment solutions
“It’s almost as if successful advertisers whose campaigns take off and deliver are being punished and crippled by credit card rules that were written by an industry decades ago,” said Zach Johnson, Founder and CEO, dash.fi. “The legacy card providers and other financial institutions simply don’t understand the everyday needs of eCommerce brands as they work to grow their businesses. The dash.fi card meets the critical needs of advertisers and makes sure they have everything they need to maximize growth in a highly competitive market. We look forward to working with Sila to continue to innovate for our customers.”
Sila’s payment infrastructure as a service allows dash.fi to access bank accounts securely and in compliance with applicable regulatory regulation. Sila’s KYC and KYB services reduce the risk of fraud and provide critical data points that allow dash.fi to provide better services to its commercial clients. The ability to use Sila’s technology to offer numerous virtual cards is a significant competitive advantage for dash.fi’s when talking to its customers.
“The new financial world that we at Sila are envisioning is all about replacing generic one-size-fits-all solutions with tailored services that make all the difference for a specific audience,” said Shamir Karkal, CEO and co-founder of Sila Inc. “dash.fi is a shining example of what is possible and we are proud to be their technology partner.”
Sila is a fintech software platform that provides payment infrastructure as a service, a business-critical element for all companies that need to integrate with the US banking system and blockchain quickly, securely, and in compliance with applicable US regulation. Sila offers Banking, Digital Wallet & ACH Payments APIs for Software Teams. The firm was recognized as a ‘2021 best place to work in financial technology’. Sila is headquartered in Portland, Oregon.
dash.fi is the world’s first charge card built exclusively for advertisers to help them scale ad spend and maximize growth of their businesses. The dash.fi card is purpose-built with personalized statement cycles, smart card authorizations, and bespoke underwriting to streamline and stabilize digital ad payments for scaling global brands.