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Here's what Snap needs to do to squeeze more money out of its users

If Snap wants to win over investors, it's going need to figure out how to get more money out of its users.

Since, like its digital rivals, it makes money from advertising, that inevitably means successfully courting advertisers and agencies. There's plenty of room for growth, as right now the company only gets an average of 90 cents in revenue per user. For comparison, Facebook gets $4.23 per user as of this last quarter.

Wall Street is not happy with Snap right now. The stock plunged 20 percent after its first ever earnings report Wednesday missed expectations.

With Snap's ad revenue projected by eMarketer to reach $1 billion this year, it can be a strong digital advertising presence. Here's what advertisers say it needs to do:

Build its core youth audience

Snap said it had 166 million daily active users as of last quarter. With competitor Instagram Stories already more popular despite only launching in August, it doesn't bode well. But while Snap may not be able to beat Facebook, but it can remain relevant if it keeps its in-demand younger audience.

"The core audience from Snap is the reason why advertisers are there," said Chris Paradysz, co-CEO of PMX Agency.

If Snap can stem its attrition rate and keep younger users engaged with the content, digital advertisers will be interested.

"Some of the more recent research shows there's not always the audience duplication across platforms among super heavily active users," said media agency Group M head of paid social Kieley Taylor.

People are unlikely to move to another platform if they've already built an audience...


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