Publishers are hoping they like a newly promised Snapchat redesign, because they're souring on the service as it stands. Deals to share ad revenue aren't leading to expected payoffs, and audiences in some cases are actually declining, some publishers say.
"Revenue share numbers have been far lower than we want," says a publishing exec who works with the company. "Snapchat has to be way more aggressive getting users to the content more frequently."
An executive at one of Snapchat's longtime media partners says traffic has been falling in recent months, even as it has grown on platforms such as Facebook and Instagram. "You expect audience to grow, not get smaller," the exec says.
Snapchat's woes were on display last week, when it reported third-quarter ad sales that missed already lowered expectations by $30 million. The company has been moving to a more automated ad sales system that undermined prices, down 60 percent. User growth also came in lower, up just 3 percent over the quarter a year earlier.
Snapchat's promise to redesign is a tacit concession. It's embracing machine learning to help determine what content users see, CEO Evan Spiegel said during the company's quarterly call.
"We are going to make it easier to discover the vast quantity of content on our platform," Spiegel said. Snapchat declined to comment further.
Not all publishers are having problems. "Stay Tuned," produced by NBC News, reached 12 million 13- to 24-year-olds in September. And Hearst keeps increasing the frequency with which it posts.
But the automated ad system that Snapchat is adopting to expand its pool of advertisers lacks a price floor. It handled 80 percent of the sales in the third quarter, leaving publishers that had been striking high-priced deals on their own to compete with the drastically cheaper automated sales: Ads that cost $1 per thousand views in Snapchat's ad auctions brought as much as 20 times that when bought directly from a publisher.