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Snapchat continues to solidify its leading position in consumer mobile AR. After announcing several milestones at its December developer event and Q3 earnings, its Q4 earnings last week signaled continued momentum. In fact, AR was a bright spot in an otherwise mixed Q4.
Among other lens-based updates, more than 200 million Snapchat users engaged with AR daily in Q4. As we examined last week, it has the highest percentage of its overall user base that’s engaged with AR. Its “cartoon” lens alone achieved 1-billion impressions in its first three days.
Panning back to overall results, Snap brought in $911.3 million in Q4 revenue, up 62 percent year-over-year. It added 8 million daily users which brings it to 265 million, up 22 percent year over year. Net income loss was $113 million, and adjusted EBITDA was $166 million.
Back to AR milestones, there were several tidbits peppered throughout Snap’s earnings announcement and analyst call. To synthesize this for AR Insider readers, we’ve parsed and pulled all the AR-related data and comments for this week’s Data Dive. See the breakdown below.
Figures & Features
Diving in, here’s the quick-hit list of AR-nuggets we pried out of SNAP’s Q4 earnings.
Figures
— More than 200 million daily active users engage with AR every day on average.
— Snapchat’s AI-powered ‘Cartoon’ Lens generated 1-billion impressions in its first three days.
— OnePlus created Lenses for Diwali, which achieved 80 million+ impressions and more than 14 million users in India.
— Activision’s Call of Duty: Black Ops lens campaign achieved an 11-point lift in brand favorability and a 5-point lift in purchase intent.
— Snapchatters exposed to multiple ad products saw an average 17-point lift in intent.
— 5,000 lens developers and enthusiasts attended the December Lens Fest.
Features
— Snapchat added food and wine labels to its Scan visual-search feature, including the ability to reveal nutrient information.
— Lens Studio added new tools and workflows for creation management, and capabilities for LiDAR-powered lenses.
— Snapchat launched its first 5G-enabled Landmarker Lens in partnership with Verizon featuring the band Black Pumas, geo-anchored at the New York Public Library.
— Snapchat launched a partnership with Perfect Corp to enable more than 200 beauty brands to upload their catalogs to the Snap Camera for augmented reality try-on.
— Other brands that launched lens campaigns in Q4 include NYX Professional Makeup, Ralph Lauren, Sweat, and The New York Times.
— Snapchat added app-installs as a goal-based bidding objective for sponsored AR Lenses.
Select Earnings Call Quotes
Snap CEO Evan Spiegel
“We are inspired every day by the creativity of our Creator community who have made over 1.5 million Lenses using Lens Studio across a growing variety of use cases.”
“Too Faced Cosmetics launched an eye makeup tutorial Lens through Lens Studio. The Lens overlays each step of makeup application in augmented reality and can be activated anytime by scanning the product’s packaging. The brand’s Lens organically grew to become one of our top-performing Lenses with millions of people using it to learn about the product.”
“Other examples include NYX Professional Makeup’s Virtual Store they created in Lens Studio where people can walk around and explore their products in AR. In addition to promoting this experience on their Snapchat brand profile, they’re also leveraging Camera Kit to distribute our Lens to partners like Triller.”
“We are doubling down on our solutions for beauty with our partnership with Perfect Corp, which will enable hundreds of makeup brands to seamlessly create high-quality makeup AR experiences. Beauty is just one of the many areas where we see opportunities to provide valuable utility through augmented reality.”
“We are now powering AR experiences on other apps through Camera Kit, further expanding the opportunity of Lens Studio. In just the past two years since our first partner summit, we have launched several new capabilities and thousands of successful partner integrations, and we look forward to continuing this momentum as we expand our platform.”
“We successfully made that transition with Stories which we monetize with full-screen vertical video ads and with our Camera, where businesses can pay to promote their Lenses. All of our platforms share the same powerful monetization infrastructure, which drives strong ROI for our advertising partners.”
Snap Chief Business Officer Jeremi Gorman
“Adoption of our AR Lenses have benefited from virtual try-on’s. Consumers are in need of new ways to experience products and brands need to reach consumers where they are; at home. With both consumers and brands open to these new experiences, our platform is perfect for this moment. For example, Dior recently launched an AR trial Lens featuring six different products from their new B27 sneaker launch.”
“We’ve also been investing in optimization algorithms that dynamically serve AR experiences to Snapchatters who’re most likely to meet a brand’s goal. We’ve seen Shoppable Lens campaigns drive a 2.4 times higher intent than the average across all Snapchat campaigns measured in Q3.”
“The acceleration of growth in Rest of World reflects the benefit of improved application performance in local markets, the popularity of augmented reality Lenses created by our community, and investments to better serve our community, including local content, local marketing partnerships, and broader language support.”
“We’ve been really focused on demonstrating the ROI of investing in Lenses and I think that’s really important. What used to be this kind of takeover products for these big branding moments has now turned into a highly performing ad format where you can buy directly from the Lenses themselves, where you can do goal-based bidding down funnel activities on Lenses.”
“It does take a little bit of time to build, but we’re also heavily investing and improving tooling for Lenses and making them easier to build in Lens Studio, including creating Lens Web Builder, to make it easy for anyone to build their own AR experience online.”
Flywheel Effect
Some of the emphasis above is on Snap’s developer community, which continues to be its lens growth engine. Making Lens Studio more attractive for creators at all skill ranges is correspondingly a guiding principle for Snapchat, seen most recently at its December Lens Fest.
Panning back, this is all key to Snap’s AR flywheel effect. Robust lens libraries attract users and boost engagement. A growing audience then attracts lens developers which further expand the library and, in turn, more users. And all of the above attracts the real endgame: advertisers.
Snap knows this virtuous cycle kicks off with developers, hence its ongoing support and community building. It’s come a long way from initially keeping AR lens design in-house (where TikTok’s AR efforts are today). Lens Studio has been its way to scale up volume and creativity.
Throughout that process, Lens Studio tools and workflows have gradually evolved, up to and including version 3.3. Standouts and milestones over the past two years include creator profiles; hand & body templates; Scan; Landmarkers; Local Lenses and Snap ML. Next up… LiDAR.
If that momentum is any indication, we’ll continue to see Lens Studio evolve rapidly. Snap is driven to propel AR as an increasingly-influential component of its revenue model. It’s internalized the feedback loop of AR-driven financial success and is living up to its “camera-company” title.
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