🚨 guidance for Q1 is *awful*:🚨
YTD revenues are down 7%.
Its Q1 projection: revenues will fall -2% to -10%.
Shares just fell 14%
Why?
*thread*
Conversation
The negative forecast is a shock: from 2018 to 2021, Snap revenues grew at annual rates between 43% and 64%. Investors have priced in just 9 per cent growth for 2023, but Snap is now raising the prospect of a revenues failing to match the prior year.
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The figures reflect the long ramifications of Apple's privacy changes, which have caused the likes of Snap and Facebook to completely re-architect their ad infrastructure and convince clients that their platforms remain indispensable marketing venues.
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Snap's doc to investors says it has made "improvements to our direct response performance offering" and that it can deliver higher-quality conversions "with fewer impressions."
but: "it will take time for these improvements to translate into improved topline growth."
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"As we utilize our inventory more efficiently, this frees up impression supply, which is then made available in our auction, **but it may take time for this supply to then be absorbed and fully monetized.**
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..."it can take time for this to become evident to advertisers and for them to raise their willingness to pay in the auction to reflect the improved performance."
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Snap emphasised how it is using machine learning to deliver more relevant ads, to show advertisers that even as the number of eyeballs seeing ads diminish, each eyeball is now more valuable and likely to click.
quote to follow:
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“We will be using the signals we gain from improved observability and measurement of high-intent conversions to identify users' intent and continually improve our machine-learning algorithm, which will enable us to create a better and more relevant experience for Snapchatters."
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“DAU will be between 382 and 384 million in Q1 2023. On the monetization side, we anticipate that the operating environment will remain challenging, as we expect the headwinds we have faced over the past year to persist throughout Q1."
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Our rep just sent us a list of back end updates they made to their algorithm that are supposed to help DR campaigns & reporting in 3rd party platforms
BUT doubtful businesses will try them in this macro environment especially with ROAS on Meta getting back to pre-ATT levels