Snap's Ad Business Could Slow Down Even as It Speeds Toward an IPO

Vertical video is still a challenge for agencies

Snap Inc. is set to begin trading on the New York Stock Exchange as early as March 2, and the red-hot social app hopes to pull off the largest IPO since ecommerce giant Alibaba in 2014. The mobile company is valued at up to $22 billion, with the bulk of revenue coming from Snapchat’s wacky, face-swapping lenses and full-screen vertical video ads that have flipped the marketing world on its head. But creative challenges around building bespoke content for the app, as well as increased competition from Instagram, could slow down Snap’s success in nailing down the kinds of megadeals from big agencies and marketers—like the rumored $200 million ad commitment from an unnamed holding company, reported last week by the New York Post—that it needs to compete with Facebook and Google.

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This story first appeared in the Feb. 27, 2017, issue of Adweek magazine. Click here to subscribe.