Snapchat Ad Sales to Reach $935 Million Next Year: eMarketer

Not Expected to Top $1 Billion Until 2018

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Snapchat's impact on the ad market is growing as it approaches $1 billion in revenue in 2017, according to new figures from eMarketer.

Snapchat will collect $367 million in ad revenue in 2016 and grow that figure 155% next year to $935.5 billion, eMarketer said Tuesday. It's the first breakdown of Snapchat's mobile ad business by eMarketer, which studies the digital ad market worldwide. The figures reflect the revenue that Snapchat keeps after it shares some with partners.

Snapchat has been developing its ad business with innovative mobile formats such as sponsored animated lenses. It has been working with top brands to design ads that fit the platform, which is based on people sending friends videos that disappear within 24 hours (although it recently added a "Memories" function to save some).

Snapchat now has 150 million daily users, according to advertisers familiar with its latest numbers.

Snapchat also has a section, called Discover, where media companies like NBC, Vice, BuzzFeed, and others like the National Football League sell sponsorships alongside special daily content.

EMarketer estimated that 43% of Snapchat's ad revenue comes from the Discover portion of the app, after it pays out its revenue share with the media companies. But vertical video ads in Snapchat Stories will overtake Discover as the dominant revenue generator next year, eMarketer said.

The animated lenses, which sponsors create and people put on their videos, account for about 20% of Snapchat's ad business, the report said.

Snapchat won't top $1 billion in ad sales until 2018, according to eMarketer.

Advertisers are clearly pouring more money into Snapchat, but it still faces competition from more mature ad platforms like Facebook, Twitter and YouTube.

Snapchat's latest investments have been going toward building ad technology that make it more efficient to serve ads, target them and measure their impact.

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