Snapchat's finally bringing in more ads, but that might be turning people away from the platform.
On Thursday, the messaging and media app released its third-quarter results that showed another decline in daily users, but a welcome uptick in ad revenue to $298 million, an increase of 43 percent year-over-year. Snapchat also forecast a company record for ad revenue in the fourth quarter, projecting it will come in as high as $380 million.
The bad news is that Snapchat's user base declined to 186 million, from 188 million in the second quarter and 191 million daily users in the first quarter. The drop followed a mismanaged redesign of the app in the beginning of the year, and since then there has been a major overhaul at the top echelons of the company. Imran Khan, the company's chief strategy officer, is leaving as of next month, and his role is being replaced by two newcomers -- Jeremi Gorman, coming from ad sales at Amazon to be chief business officer at Snapchat, and Jared Gursud filling in as the next chief strategy officer.
"I am incredibly proud of our team and what we have accomplished in such a short time," said Evan Spiegel, Snapchat's CEO, in remarks following the release of the quarterly report. "We are excited about the future and we have just scratched the surface with respect to our long-term growth opportunities."
There are concerns that the quality of advertising on Snapchat could be harming the overall product, according to Rich Greenfield, media analyst at BTIG Research.