Snap's Marketing Expense Is Exploding
Snap (NYSE: SNAP) recently rolled out a self-serve platform for Snapchat ad buyers. But its second-quarter results show that the efficiencies of letting advertisers buy ads themselves haven't shown up in Snap's bottom line. In fact, Snap's sales and marketing expense in the second quarter climbed to 50% of revenue, up from 34% in the second quarter last year.
Snap's profitability depends on its ability to leverage its operating expenses. Snap continues to invest heavily in R&D in order to stay ahead of competition. For now, operating leverage will have to come from sales and marketing, and the self-serve platform is key to that. But investors might have to be patient for the sales team to show improved efficiency.
Image source: Snap.
Source: Fool.com
