"Advertisers are attracted to Snapchat for its broad reach among young millennials and those in Generation Z, which are valuable demographic groups for many businesses," Cathy Boyle, eMarketer principal analyst, writes in a press release. "To engage those often hard-to-reach consumers, Snapchat has expanded its advertising portfolio over the past year to include a wider array of video ads, and more sponsored geofilters and sponsored lenses.”

The market researcher indicates Snapchat’s Discover feature generates the largest share of the company’s ad revenues at 43%. The social network’s Stories function is, however, overtaking the Discover feature as the dominant ad revenue source. 

Snapchat garners a strong 31.6% share of social network users in the US, but “only captures 2.3% of social network ad dollars, having launched its ad platform in mid-2015”, according to eMarketer. 

“Snapchat has improved its targeting capabilities and partnered with 11 measurement firms to address the concerns voiced early on,” notes Boyle. “What it has yet to prove is whether it can consistently deliver a better return on investment for advertisers than other social networks.”

The platform is said to currently derive 95% of its ad revenues from the US. eMarketer forecasts that as it begins to monetise users in other countries where it has a substantial user base, the non-US share of its ad revenues will grow. By 2018, a quarter of its ad revenue is expected to come from outside the US.

Read the full release here.