Snapchat, the image messaging and multimedia mobile app company has made it official: It’s going public.
Early response to the news is not surprising.
The old guard that still can’t figure out how Elon Musk made an electric car company work – and destroy shorts at the same time – are flummoxed by the suggested valuations on this thing.
With this IPO, Snapchat could soon be valued at as much as $25 billion. That’s a lot of scratch for a photo-messaging app. Or is it?
According to a recent report from eMarketer, Snapchat could generate as much as $1 billion in 2017. Check it out …
After weathering criticism of its initial ad offerings, Snapchat is poised for explosive growth in ad revenues in the coming years. Worldwide, it will generate $366.69 million in ad revenues this year, with that figure jumping to $935.46 million in 2017.
The truth is, there is absolutely some real value to an app that allows users to have their messages disappear in ten seconds. Especially when you’re talking about folks sexting each other with this thing. And let’s be honest, that’s one of the main reasons Snapchat is so successful.
I get that Snapchat is trying to shed its “sexting app” reputation, but that doesn’t change the fact that the company absolutely built its empire by catering to the millions of horny millennials that have been gifted the kind of technology I would’ve killed for back in my college years.
Of course, it’s no longer just a “sexting” app. It’s a digital force that capitalized on the need for privacy, and used that “in” to attract the very lucrative millennial market.
Today, 30% of 18 to 24-year-olds use the app on a daily basis. And for advertisers, that’s gold!
As eMarketer analyst Cathy Boyle pointed out, advertisers are attracted to Snapchat for its broad reach among young millennials and those in Generation Z, which are valuable demographic groups for many businesses.
To engage those often hard-to-reach consumers, Snapchat has expanded its advertising portfolio over the past year to include a wider array of video ads, and more sponsored geofilters and sponsored lenses.
No, Snapchat is not just some random, over-hyped app. It’s a marketing behemoth disguised as a hip, silicon valley start-up. But with this IPO, that disguise is going to be removed. And rest assured, dear reader, it will be one of the biggest IPOs of 2017.
