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Snapchat


The easier social and mobile platforms can make the process of creating ads, the better. Snap Inc. (NYSE: SNAP) just released Snap Publisher, a tool designed to do just that.

Some are calling Snap Publisher part of an evolution of social and mobile advertising. They say it could create a new paradigm where any marketer could easily put together their own advertising for the app.

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How Snap Publisher Works

Advertisers start with graphic assets they already use elsewhere and put them into a template to create new mobile ads. The tools in Snap Publisher let marketers work with available and familiar assets and add them to Snap Publisher templates. According to reports new ads can be produced in about 2 minutes.

Snap Publisher is Snap Inc.’s way of saying it has arrived as a viable advertising platform just like Facebook Inc. (NASDAQ:FBC), Alphabet Inc.’s (NASDAQ:GOOGA) Google and Facebook owned Instagram. Importantly, Snap Publisher replaces Snapchat’s old proprietary advertising model which experts have said limits the number of advertisers willing to advertise on the platform.

What About Cost?

In March Snapchat talked up its “Snapchat Shows Initiative” to ad agencies. The idea was to bring more exclusive, TV-style programming to Discover. Video production partners like A+E Networks, NBC Universal and others showed some excitement. Ad buyer took a “wait-and-see” approach. Perhaps for a good reason.

Pricing for ads was considered high and used a “share of voice” structure that is weighted based on other advertisers on the show. Now with Snapchat Publisher, agencies are wondering if Snapchat is going to ramp up the price as more marketers come on board.

Adding Up The Pros And Cons

With this new product and the potential to increase ad revenue, the question for Wall Street is “What will happen to the stock?” Tech analyst Brian White told CNBC recently that he believes the stock could bottom out then rise to as much as $30 a share.

Comparing Snapchat to Facebook, White said about 4 months after Facebook went public the stock was down 60% - then rose. Four months after Snap’s IPO the stock is down 48%. According to White, it’s ready to go up.

White said, "I think it's a great buying opportunity." He then added, "If you look at a lot of high growth companies, in the first three years after an IPO, they trade at nine to 22 times enterprise value to revenue."

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Jim Cramer’s Take

CNBC's Jim Cramer said last week that Snap might get a “summer bump.” According to Cramer, insiders who bought in at the IPO offer price won’t sell their stock July 31 when allowed.

Said Cramer, "I think the next thing that happens is the insiders come out and say, 'We're not selling, not at these prices. If anything, were buyers.'”



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