Snap CEO Evan Spiegel has announced a renewed focus on expanding and diversifying the company's underperforming advertising business, with a particular emphasis on augmented reality (AR).

This strategic shift towards augmented reality is aimed at enhancing Snap's competitive edge against major social media rivals such as Meta and TikTok.

As a leader in augmented reality, Snap enables advertisers to create engaging ad experiences, which have been shown to attract five times more attention than traditional ads.

The company generates most of its revenue from advertising, with a notable increase in direct-response ads, which have doubled compared to the previous year.

In response to declining advertising effectiveness, Snap launched the Conversions API, which has seen a 300% increase in adoption, helping track user activity without relying on web-based cookies.

Snap's stock has plummeted nearly 90% from its all-time high, reflecting ongoing struggles with profitability, including a 47% decline in stock value in 2024 alone.

Evan Spiegel acknowledged that Snap's advertising growth has lagged behind its competitors, prompting the need for significant changes.

If Snap successfully implements its AR and advertising technologies, it could restore investor confidence and improve its market share amid increasing competition.

Despite these initiatives, Snap's revenue outlook for 2024 remains weak, indicating ongoing challenges in the advertising sector.

Despite these innovative efforts, Snap's lack of profitability remains a significant concern, with the company reporting a net loss of nearly $1.2 billion over the past year.

In early August, Snap issued a weak revenue forecast for fiscal 2024, projecting earnings of $5.34 billion due to a decrease in advertising spending.

In Q2 2024, Snap reported $1.24 billion in revenue, marking a 16% year-over-year increase, with notable contributions from the Snapchat+ subscription service, which has reached 11 million subscribers.