Topline
Amazon and the company behind popular social media app Snapchat revealed a deal Tuesday that would allow users to purchase Amazon products on the Snapchat app, prompting Snap Inc’s stock to rise more than 7% on Tuesday, as the company deals with years of ad revenue struggles.
In this photo illustration the logo of Snapchat can be seen on a smartphone on March 10, 2022 in … [+]
Key Facts
The stock initially jumped almost 9% to $12.34 a share earlier Tuesday, before settling in $12.15 a share when markets closed.
An Amazon spokesperson told multiple news organizations Tuesday this new agreement will allow users to see “real-time pricing, Prime eligibility, delivery estimates, and product details” and purchase select products within the Snapchat app.
Forbes has reached out to both Snap and Amazon.
Tangent
Snap’s agreement with Amazon follows a similar deal Amazon struck with fellow social media company Meta on Thursday that will allow Facebook and Instagram users to similarly purchase Amazon products on those platforms, according to CNBC. In September, TikTok—another social media giant—launched its “TikTok Shop” to allow its users to purchase products through the app.
Key Background
This share price jump still leaves Snap far from its heyday. In September 2021, the stock peaked at a price of around $83, 692% higher than Tuesday’s price. Over 2022, it took heavy losses, falling around 80%. That dramatic fall came after a 2021 Apple policy that made it much harder for social media companies to target iPhone users with ads, undercutting a major growth area for the company. The policy gave iPhone users more control of their personal data and made it easier to prevent apps from companies like Snap, Meta and Twitter from using that personal data to sell targeted ads. The result was a major loss of ad revenue for those companies. In the case of Meta, it forecasted $10 billion in lost revenue over the move. Snap is still struggling to rebound from that change.
Further Reading
Amazon Reaches Deal to Run Shopping Ads on Snap (The Information)
TikTok Expands Into E-Commerce With TikTok Shop (Forbes)
Apple, Meta And The $10 Billion Impact Of Privacy Changes (Forbes)
Source: https://www.forbes.com/sites/willskipworth/2023/11/14/snapchat-shares-jump-7-after-deal-to-sell-amazon-products-on-app/