In a recent interview with CNBC, Evan Spiegel, CEO of Snap Inc., shared his views on the company’s impressive quarterly performance, which saw stock prices rise approximately 25%. The increase comes amid a broader recovery in digital advertising and Snap’s successful integration of AI tools to improve advertising effectiveness and content relevance.
The role of AI in accelerating advertising revenue
During the interview, Spiegel highlighted the significant impact of Snap’s AI advancements on the company’s advertising revenue growth. “It took us longer than we expected,” admitted Spiegel, referring to the deployment of conversion APIs and large unified models that significantly improved ad interactions and results for ad partners.
These technological improvements not only streamlined ad delivery, but also strengthened the performance of Snap’s advertising platform, translating into tangible financial gains. “Improvements to our advertising platform translate into better results,” Spiegel explained, emphasizing the importance of AI in driving more effective and efficient advertising strategies.
Broad recovery in digital advertising
Spiegel also commented on the broader digital advertising landscape, noting widespread recovery across various sectors. This rebound is partly attributed to resolving supply chain issues that had previously hampered production and distribution during the pandemic. As these bottlenecks ease, businesses are increasingly turning to digital platforms to drive demand.
“The overall economy has remained healthy and consumer confidence is strong,” Spiegel noted, suggesting a positive environment for continued growth in digital ad spending.
Strategic spending direction and investment in AI
For the first time, Snap guided planned spending for the full year, forecasting a 5% increase. This forecast reflects Snap’s strategic investments in AI infrastructure and critical operational improvements. “We invested an additional $100 million per quarter in cloud-based infrastructure,” Spiegel said, emphasizing the company’s commitment to strengthening its technological capabilities to support advanced advertising models.
The surprising growth of Snapchat Plus
Discussing the unexpected success of Snapchat Plus, which almost reached its mid-term goal of 10 million subscribers, Spiegel discussed the appeal of the platform and its potential for future growth. The subscription service’s popularity is driven by features like app personalization and generative AI, which allow users to create personalized experiences, such as generating digital animals that look like their own.
“As a team, we have not yet determined our next step, but the turnout was pleasantly surprising,” Spiegel remarked. This enthusiasm for customizable and interactive features means a shift in user engagement strategies, leveraging AI to create more personalized and immersive user experiences.
Looking forward
With Snap’s strategic investments in AI and focus on improving user engagement through innovative features, the company is well-positioned to capitalize on the growing digital advertising market. As Snap continues to refine its platform and expand its offerings, the potential for sustained growth and innovation remains high, promising an exciting future for the company and its stakeholders.
