Snapchat’s (NYSE: SNAP) advertising revenue is set to overtake Twitter’s advertising revenue by 2019 as the app gains popularity among young users.
Advertisers are spending higher amounts of their digital ad budgets on targeting Snapchat’s users as more young people are flocking to the app from platforms such as Facebook (NASDAQ: FB).
According to eMarketer, a market research company, Snap’s UK ad revenue growth is predicted to increase from £21.9 million in 2016 to £181.7 million in 2019.
“Snapchat continues to pull in users and, by extension, ad revenues,” said Bill Fisher, UK senior analyst at eMarketer. “An almost doubling of revenues in 2018 is a great result.”
Despite the app’s growth, the app faced a turbulent weekend after Rihanna blasted the app on Twitter, causing shares to fall four percent.
After Snapchat played an advert for a game called “Would You Rather!”, showing pictures of Rihanna and Chris Brown next to captions that said “Slap Rihanna” and “Punch Chris Brown,” the singer took to Twitter.
“SNAPCHAT I know you know you ain’t my fav app out there! But I’m just trying to figure out what the point was with this mess!,”
“You spent money to animate something that would intentionally bring shame to DV victims and made a joke of it!!!,” she said. “Shame on you. Throw the whole app-oligy away.”
Following the tweet, shares in the group fell from $17.88 (£12.83) to $17 throughout the day.
This is not the first time a celebrities tweet has caused shares in Snap to drop. Last month, Kylie Jenner single-handedly wiped $1.3 billion from Snapchat’s market value.
She reality star tweeted: “So does anyone else not open Snapchat anymore? Or is it just me… ugh this is so sad.”
John Illsley a director at accountancy firm Moore Stephens highlighted the vulnerability of social media platforms.
“This underlines the fragility of social networking platforms from a corporate finance perspective. It is easy to forget just how young these businesses are.”
