Snapchat’s parent company, Snap Inc., has appointed Ajit Mohan as the Chief Business Officer (CBO), a key role that will see him oversee the company’s expanding advertising business. Mohan, who previously served as Snap’s Asia Pacific head, is tasked with growing Snap’s advertising business across regions and aligning its revenue and operations teams. This move comes after significant growth in Snap’s advertising revenue, particularly from direct-response ads. Mohan’s promotion reflects Snap’s strategic focus on increasing its presence in emerging markets like India and expanding its advertising business globally. The promotion follows a notable year of financial performance for Snap, which saw its revenue increase, with a major contribution from small- and medium-sized businesses (SMBs).
1. Introduction to Snapchat’s Growth and Business Model
Snapchat, a multimedia messaging app created by Snap Inc., has evolved from a simple social platform to a global powerhouse with a focus on augmented reality (AR) features and a dynamic advertising ecosystem. With over 453 million daily active users, Snapchat’s innovative approach has caught the attention of businesses looking for direct-response advertising solutions.
Founded by Evan Spiegel, Bobby Murphy, and Reggie Brown in 2011, Snap Inc. introduced Snapchat to the world as a platform for sending disappearing photos and messages. Over the years, it has diversified its offerings, introducing features like Stories, Filters, Lenses, and more recently, augmented reality (AR) tools for advertisers.
Snap’s revenue model is centered around advertising, with revenue derived from both direct-response ads and brand-oriented ads. The company also generates revenue from in-app purchases related to premium features. As of recent reports, Snap has also focused on making its advertising more effective by integrating new ad formats like “Sponsored Snaps” and “Promoted Places.” This pivot in advertising models has paid off, as Snap saw a 16% year-on-year revenue growth in 2024, driven largely by SMB contributions.
2. Ajit Mohan’s Appointment: Strategic Importance for Snapchat
Ajit Mohan a elevation to the role of Chief Business Officer (CBO) at Snapchat marks a key moment in his career and represents a strategic shift for Snap. Having joined the company in November 2022 as the head of Asia Pacific (APAC), Mohan has played a crucial role in leading Snap’s expansion in the region. His journey at Snap began with overseeing its business in key APAC markets such as India, Australia, and China. As a result of his leadership, Snap witnessed rapid growth, particularly in India, where its user base grew significantly, reaching over 200 million monthly active users.
Mohan’s vast experience, both in business leadership and marketing, makes him the perfect fit for this expanded role. Before joining Snap, Mohan served as Vice President and Managing Director of Meta (formerly Facebook) in India, where he was instrumental in scaling Meta’s advertising business in one of the world’s largest markets. Additionally, Mohan’s tenure as CEO of Hotstar (now Disney+ Hotstar) allowed him to steer India’s digital video streaming landscape, further solidifying his expertise in growing digital businesses. His appointment also reflects Snap’s commitment to aligning its leadership team with its long-term goals for market expansion and revenue growth.
3. Snap’s Evolving Advertising Model
Under Ajit Mohan’s leadership, Snap’s advertising business has been transitioning to a more performance-driven model. The shift from traditional brand advertising to direct-response ads has been a crucial move to boost Snap’s advertising revenues. In 2024, Snap reported a 16% year-on-year increase in revenue, totaling $5.36 billion. Direct-response ads, which grew by 16% year-on-year, have emerged as a key revenue driver, especially with small- and medium-sized businesses (SMBs) contributing to the majority of this growth.
Moreover, Snap has introduced two innovative ad formats—”Sponsored Snaps” and “Promoted Places”—to attract new advertisers and retain existing ones. These ad formats aim to provide a seamless and integrated advertising experience within the Snapchat ecosystem, especially targeting the younger demographic.
The rise in small-business advertising on Snapchat has been significant, with SMBs becoming the largest contributor to Snap’s ad revenue growth. This strategic focus has enabled Snap to diversify its advertising revenue streams and mitigate risks associated with reliance on a small group of large clients.
4. Snap’s Strategic Move to Expand in Emerging Markets
Snap’s promotion of Ajit Mohan to CBO also highlights its strategic focus on growing its presence in emerging markets like India. India is one of the world’s most exciting digital markets, with over 200 million Snapchat users, making it a key growth region for the company. Ajit Mohan’s leadership in APAC has already yielded impressive results, and his new role will allow him to bring this experience to Snap’s global advertising operations.
Snap is positioning itself as a challenger to established players like Meta (Instagram) and Bytedance (TikTok), both of which have well-established advertising ecosystems. The competition for advertising dollars in the global market is fierce, with Snapchat focusing on more personalized and interactive ad experiences powered by augmented reality.
5. Financial Performance and Future Outlook
Snap’s recent financial performance, including a 14% year-on-year increase in Q4 2024 revenue, shows that the company’s advertising efforts are gaining traction. With advertising revenue rising to $1.41 billion, Snap is clearly on a growth trajectory. However, the company is still working to recover from previous financial losses, and despite the positive growth in SMB advertising, brand advertising remains a challenge.
Snap’s push for innovation, especially with the integration of AR technologies, positions the company well to tap into the evolving advertising trends that prioritize consumer engagement. In addition, Snap is focused on improving its ad products and operations, further simplifying the ad-buying experience for businesses of all sizes.
6. The Road Ahead for Snap and Ajit Mohan’s Role as a CBO
Ajit Mohan a elevation to Chief Business Officer (CBO) comes at a time when Snap is undergoing significant transformations in both its business and product strategy. With Mohan at the helm of Snap’s advertising operations, the company is poised to further solidify its place in the advertising ecosystem. His leadership will be instrumental in driving Snap’s mission to deliver innovative and effective advertising solutions for businesses globally.
Snap’s focus on expanding its advertising reach, especially in high-growth markets such as India, alongside the development of new ad formats and improved ad-buying experiences, will continue to shape its growth trajectory in the coming years. Mohan’s vast experience in scaling businesses in emerging markets will be crucial in helping Snap capitalize on the immense potential of markets like India and Southeast Asia.
Learning for Startups and Entrepreneurs
Ajit Mohan’s promotion to Chief Business Officer at Snapchat offers valuable lessons for startups and entrepreneurs. Here are a few key takeaways:
- Focus on Market Expansion: Just like Snap has prioritized India and other emerging markets, startups should focus on expanding into high-growth regions to maximize their potential.
- Adapting Business Models: Snap’s shift towards performance-based advertising showcases the importance of adapting business models to cater to market demand and business needs.
- Invest in Innovation: Continuous innovation, especially in emerging technologies like augmented reality, can set a company apart in a crowded marketplace. Entrepreneurs should embrace new technologies to stay ahead.
- Scaling Operations Efficiently: Effective leadership and scaling operations across regions can significantly impact growth. Startups should aim to create efficient leadership structures to facilitate expansion.
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