Snap (SNAP - Free Report) recently partnered with ad tech firm, Tyroo to drive its ad monetization efforts in India. Although the terms of the deal were not disclosed, it is believed to be a revenue sharing arrangement between both the companies.
Reportedly, Snap is bringing filters, the Stories platform and its augmented reality driven Lens feature for advertisers. Per Geoffrey Reed, Snapchat's head of international expansion, the partnership will enable Snapchat to reach out to more advertisers in the country, thereby fueling growth in the Asia Pacific region.
Notably, the move comes at a crucial time for Snap, which has recently been battered by users over the redesign issues. Moreover, lackluster user and revenue growth seem to have forced the company to focus on India, the country where the CEO did not want to expand the Snapchat app earlier.
India Holds Potential
Per IAMAI report, given the availability of cheaper smartphones, faster connectivity and affordable services, the figure is estimated to reach 478 million by June 2018. This bodes well for Snapchat as the developed markets have reached maturity.
A burgeoning well-educated middle class, increasing spending power and rapid adoption of smartphones will boost Snapchat’s prospects in the country.
Out of Snapchat’s 199 million users, more than 9 million are from India, who spend an average of 30 minutes daily on the app.
Focus on Expansion
Advertising is the primary source of revenues for Snap and therefore increasing its effectiveness is the company’s target.
Notably, Snap is creating innovative products to attract/retain users as user growth remains the key to draw advertisers to the platform.
We note that the lack of popularity in the international quarters is a big concern for Snap. The company’s current initiatives to target the global market will help it stay competitive in the digital ad market, which is currently led by Facebook (FB - Free Report) , Alphabet (GOOGL - Free Report) and Twitter (TWTR - Free Report) .
Currently, Snap has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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