The advertising research firm lowered its 2017 US ad revenue forecast for Snap from $US770 million to $US642.5 million, citing that Snapchat still “remains in the experimental bucket for many marketers.”
The adjustment marks the second time eMarketer has slashed its revenue expectations for Snap this year; the firm’s original 2017 US ad forecast of $US800 million was lowered by $US30 million in March due to higher than expected revenue sharing with publishing partners.
Now eMarketer expects Snap to make $US774.1 million in worldwide ad revenue for 2017, down from its $US900 million estimate earlier this year.
The report echoes some Wall Street analysts who have recently lowered their price targets on Snap’s stock. J.P. Morgan’s Doug Anmuth cut his price target by $US2 last week after observing the company’s rollout of self-serve ads.
eMarketer still expects strong growth from Snap over the next couple of years, with 2018 US ad revenue projected to overtake Twitter at $US1.18 billion.
But Snap is still feeling the pressure from Facebook’s Instagram, which eMarketer expects to reach $US3 billion in US ad revenue this year and $US6.84 billion in 2019.
The firm notes that although Snap has been aggressive in building out its two-year-old ad business, experimental ad products like sponsored 3D World Lenses have yet to convince marketers to fully jump on board.
(Disclosure: eMarketer and Business Insider are both owned by Axel Springer.)
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