As Snap Q3 earnings fall short, CEO vows more ways for creators to monetize content

Snapchat headquarters in Venice, CA.
Snapchat’s focus going forward will be on its creator community.

Snapchat parent company Snap watched its stock fall off a cliff in after-hours trading after a disappointing earnings report that CEO Evan Spiegel pinned on lower pricing for the company’s programmatic ad units.

But he said he was “grateful” the transition to programmatic is almost complete for Snap and looking forward to the advantages in scale and ROI that the programmatic auction will provide for his company.

That transition cost the company a 60% annual decrease in CPMs.

Looking ahead, Spiegel shifted the focus to Snapchat’s creator community and on generating more opportunities for those creators to distribute and monetize their content.

“In 2018, we are going to build more distribution and monetization opportunities for these creators,” Spiegel said, according to Variety. “Developing this ecosystem will allow artists to transition more easily from communicating with friends to creating Stories for a broader audience, monetizing their Stories and potentially using our professional tools to create premium content.”

While Snap’s revenues grew 62% to about $208 million, up from $128 million one year ago, the company’s losses mounted significantly. During the third quarter, Snap lost $443 million after losing about $124 million in the year-ago quarter.

Snapchat’s daily active users grew by 4.5 million—below Wall Street estimates—during the quarter to reach 178 million, but the company’s ARPU during the third quarter was $1.17, up 39% over the $0.84 it posted in the year-ago quarter.

RELATED: NBC forms scripted programming joint venture with Snapchat

As Snapchat turns its attention toward finding ways to keep its creator community happy, the company is continuing to pursue content partnerships with more traditional media companies.

NBC, which has heavily invested in Snap, this quarter formed a scripted programming joint venture with Snapchat.

According to The Hollywood Reporter, company executives confirmed the move and said that both NBC and Snap will get equal equity stakes in the business. Maggie Suniewick, president of NBCUniversal Digital Enterprises, told the publication that other platforms just want access to clips from existing NBC shows but Snapchat is pushing to create “something new and different for different audiences.”