New Delhi: Snap Inc., the parent company of Snapchat, is set to overhaul its advertising strategy to counter lagging performance against rivals, according to a memo from CEO Evan Spiegel to employees on Tuesday.
Spiegel acknowledged the company’s struggle to keep pace with competitors such as Meta Platforms’ Instagram and ByteDance’s TikTok in the fiercely competitive social media advertising market. “Our advertising business is growing slower than our competitors,” Spiegel candidly stated in the note.
The Santa Monica-based firm plans to diversify its advertising offerings, with a particular emphasis on augmented reality (AR) technology. This move comes as Snap grapples with a challenging financial landscape, having forecast disappointing results for the current quarter due to reduced advertising expenditure.
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According to LSEG data, Snap is projected to report revenue of $5.34 billion for the fiscal year 2024. The company’s share price has taken a significant hit, plummeting by approximately 48% since the beginning of the year.
In response to these headwinds, Snap is set to revamp its market approach by introducing new advertisement placements powered by machine learning and automation. The company is also doubling down on its investment in AR and smart glasses technology, mirroring similar efforts by industry giant Meta.
“We are investing in creating augmented reality glasses that allow people to interact with computing, the world, and one another in totally new ways,” Spiegel explained in the memo.
This strategic pivot follows Snap’s June launch of generative AI tools, which enable users to apply more realistic effects when using their phone cameras for self-recording.
