eMarketer, a research firm which offers projections of ad revenue by company, has lowered its 2017 US forecast for Snapchat for the second time this year. It’s now projecting a total of $642m for the year, down from the most recent forecast of $770m, and the original forecast of $800m. Projecting Snap’s ad revenue is difficult for several reasons, not least that the company itself doesn’t provide any guidance, but also because its shift to serious revenue generation began so recently that there’s no reliable growth rate to base future projections on – year on year percentage growth has slowed from over 400% to 286% to 153% in the last three quarters even as dollar growth has been pretty strong. Snap’s North American revenue in the first half of 2017 was $277 million, meaning that eMarketer is projecting roughly 30-40% growth in the second half over the first half. That’s fairly modest, but as we’ve seen recently Snapchat’s user growth has been modest too, and although ARPU is rising fast, it may not continue to do so at the same pace. There’s growing skepticism about Snap’s business overall, and this report feeds into that overall skepticism, but I suspect it may be a little too pessimistic based on Snap’s strong second-half revenue performance last year. But we’ll know soon enough what Q3 looks like, at least.
via Business Insider
Analyst firm eMarketer has some new numbers out on cord cutting and the impact it will have on traditional TV ad spending. Specifically, it says that later this year there will be over 22 million cord cutting households in the US, up about 5.5 million from 2016, while TV ad spending growth will slow down meaningfully, though it’s still projecting growth over the next few years. I’m in agreement with the broad trend described by eMarketer around cord-cutting: my own analysis has consistently shown accelerating cord cutting behavior, though at a rather slower rate than eMarketer is projecting – far closer to 2 million in the past year than the over 5 million eMarketer is suggesting by the end of this year. On ad spending, I’m also in agreement that growth will slow, but I think it will turn negative soon (it was already negative for the major TV companies over the past year, according to my own data gathering, thanks in part to last year’s strong election-related spending). I think a decline in the traditional TV ad business is inevitable at this point in the coming years, and the results will begin to be felt as traditional TV companies start to reduce spending to bring costs in line, which in turn will have significant effects on the overall industry.
IDC Forecasts Strong Growth for AR and VR Headsets, with VR and Commercial AR Biggest (Jun 19, 2017)
IDC Adjusts Forecast PC and Tablet Growth Downward (May 26, 2017)
IDC has adjusted its combined PC and tablet forecast downwards by several percent, with the overall picture one of shrinkage through next year followed by modest growth from 2019 to 2021. Within that broad category, desktops and standalone tablets are forecast to decline strongly, while laptops will grow slightly and “detachable” tablets (those made to be used with keyboards) will grow the fastest. IDC says it’s revising its forecast downward because those detachables aren’t growing as fast as it had thought. It’s also worth noting that any growth that exists right now in the market is entirely in the commercial market, while the consumer PC market (even including tablets) continues to shrink). It’s also worth noting that even in 2021, IDC forecasts that those detachable tablets will only be 11% of the total market. We’re continuing to see a diversification of the PC market across these various categories as both vendors and consumers try to figure out which combinations of tablet and laptop form factors and features work best, with much of the action so far at the premium end of the market. Things could get interesting (and move off IDC’s forecast trajectory) if we start to see some meaningful competition in that detachable space from vendors targeting the mid market, but there’s little sign of that happening yet.