View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. Technology
January 26, 2017

Snapchat IPO: Company seeking big ad deals

As Snap Inc. approaches its IPO this year, the company has approached big name ad companies to increase their spend on ads.

By Joe Clark

Snapchat has been petitioning ad companies for commitments in the range of $100 to $200 million ahead of its IPO.

The parent company of the popular messaging service, Snap Inc. is reportedly seeking promises from ad companies that they’ll spend a much larger sum on the service in the next year and years to come.

Snap has reportedly spoken to Publicis Group, WPP, Omnicom Group and, Interpublic Group. The amount requested is a greatly increased figure from previous ad spends,  almost triple in some cases. Snap is asking companies to spend between $100 to $200 million in 2017, whereas in 2016 WPP spent $90 million on ads on the service.

Snapchat

According to the Wall Street Journal, the aim behind this increased demand is to potentially drive up the value of the company to $25 billion, which would provide a tremendous bonus ahead of the company’s upcoming IPO.

Snapchat currently counts its user base at roughly 150 million unique users per day, with eMarketer estimates putting the company’s 2017 ad revenue at $367 million. Snapchat runs daily features from news sources on it’s discover page and regularly incorporates sponsored ‘filters’ into it’s photo messaging novelties.

Snap Inc. is expected as early as March to go public and estimates its share prices at around $20, valuing the company at $25 billion. If the $20 share price is realised, the company would win the accolade of the biggest IPO since Facebook in 2012.

Content from our partners
Why food manufacturers must pursue greater visibility and agility
How to define an empowered chief data officer
Financial management can be onerous for CFOs, but new tech is helping lighten the load

However, on Monday Trip Chowdhry, of Global Equities Research, wrote a damning note that said: “We are at the tail end of the social media boom. Novelty is giving way to fatigue,”

“Fundamental investors should avoid the IPO. Snapchat is a total junk, hyper-inflated,” reported CNBC.

In spite of this, due to Facebook and Google’s increased control of targeted advertising, many firms are expected to back Snapchat in a retaliatory move.

 

Topics in this article: , ,
Websites in our network
Select and enter your corporate email address Tech Monitor's research, insight and analysis examines the frontiers of digital transformation to help tech leaders navigate the future. Our Changelog newsletter delivers our best work to your inbox every week.
  • CIO
  • CTO
  • CISO
  • CSO
  • CFO
  • CDO
  • CEO
  • Architect Founder
  • MD
  • Director
  • Manager
  • Other
Visit our privacy Policy for more information about our services, how New Statesman Media Group may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.
THANK YOU