Snap stock was trading at $7.42 as of 11:13 AM EDT.
Snap’s stock (NYSE:SNAP) was down 27%. The company talked about some of its successes, such as making more money than expected, getting more users than expected, and giving itself permission to buy back $500 million worth of stock. But in a bad year for media that focuses on advertising, Snap recorded its worst-ever revenue growth and underperformed analyst predictions.
New direction likely to impact Snap stock
On the conference call, CEO Evan Spiegel said, “Our business continued to face significant headwinds this quarter.” He also said that the company had refocused on three strategic priorities: improving community and engagement, reviving and diversifying revenue growth, and investing in augmented reality.
When it comes to the overall ad strategy, Snap is concentrating on “raising our share of wallet while growth in the wider digital advertising category slows.” This is accomplished by attempting to raise the return on investment produced by its direct response ad platform, which, in the company’s words, “we feel are the most dependable advertising budgets in a tough economic context,”
After a brief introduction of the recently promoted Chief Operating Officer, Jerry Hunter, who stressed his focus going forward on “driving down funnel performance and enhancing the yield of our inventory for advertising partners,” the business rapidly went to Q&A. Hunter said, “We’re trying to improve optimization for lower-funnel goals and come up with new advertising formats to boost conversions.”
Chief Financial Officer Derek Andersen noticed that both direct response advertising and brand advertising saw their revenue growth slow down. While brand ads went down from year to year, DR ads grew “modestly” faster than the business as a whole.
But Andersen said that the business still expects sales to grow “at a very decent rate” during the season. Even “flattish” year-over-year sales are about a 15% step up sequentially. Snap didn’t share any forecasts for revenue or EBITDA for the fourth quarter, which was a big deal.
For this reason, Spiegel added, “we focus so actively on evolving our direct response business… and making sure that we’re truly delivering a return on ad spend for our partners.” Advertisers “want to reach, but they’re also looking for performance, especially in this period of time.” Snap was not the only social media stock down on Thursday evening.
Snap Stock Drops On Ad Spend Concerns, Dreadful Q4 Revenue Outlook
Featured Image – Megapixl © Piter2121
Author Jowi Kwasu 
