Advertising on Snapchat

Snapchat is one of the fastest growing social platforms of this time. Using the app is the rule rather than the exception among the youth. As Snapchat is constantly working on new innovations and services, the platform becomes more interesting for advertisers. With a whopping 150 million daily users (from which at least 2.5 million in the Netherlands) and 9000 snaps each second it is time to look at the future of this channel. What exactly is the potential of Snapchat when it comes to advertising?

Current advertising opportunities

In addition to the possibility to create an account as a brand and spreading content through it, or making use of influencers to distribute your brand message, there are actual advertising and targeting opportunities as well.

Snapchat is expanding their offers for advertisers. However, just like every other platform, they have their own typical advertising challenges. For example, the app does not collect many demographic data of its users. This causes that, except for geographical targeting, there are limited possibilities to reach specific audiences. Also, it is not yet possible to schedule snaps and there are no extensive analytics available, which makes it difficult to measure the results of your Snap activities. In order to be able to advertise successfully, Snapchat integrated a self-learning technology, which enables them to determine which users respond to displayed advertisements. This way advertisers can, comparable to the Facebook algorithm, still partly optimize their targeting. The new Snapchat API makes it possible to make use of an automatized bidding system. Again, this is comparable to Facebook.

Unfortunately, these advertising opportunities are not yet available in the Netherlands, but they are working on it! We will prepare you for the future and discuss several interesting types of advertising that Snapchat offers.

1. Snap Ads

By implementing so-called Snap Ads short full-screen advertising videos appear between the regular snaps a user receives from his friends. However, it is very easy to click away from a photo/video within half a second. Nevertheless, advertisements appearing between regular content have a big advantage. Most users watch their snaps with their sound on, on the contrary to many users on other platforms such as Facebook and Instagram. In addition, all videos are automatically displayed vertically, which stimulates engagement and prevents that users have to rotate their screen to watch the video. You can also offer users the opportunity to simply swipe up. This way you can show for example an article, website or longer video. This type of advertising is available from $1000. Apparently, such advertisements cost $0,02 per view, which means $20 per 1000 views.

2. Sponsored Geofilters

Another very interesting and unique possibility to advertise on Snapchat is a Sponsored Geofilter. Snapchat uses GPS to determine where a user is located, after which an adjusted filter can be offered. The easiest and most common form is a filter with a city name, but nowadays companies can also create a special Geofilter for events or another specific location. McDonalds is a good example of this. The costs for this type of advertising are very dependent on the time you want to want your filter to be available and the size of the targeted area. If you want a filter for your own wedding party, you will spend around $15. How much McDonalds paid is top secret, but it was expected that the amount reached a million dollars. Therefore it depends in this case on how extensive you want your ad to be!

3. Sponsored Lenses

In addition to the Geofilter there are also the regular Sponsored Lenses. Advertisers can create their own filter which consumers can use to make a snap. This interactive way of advertising has a lot of potential, as it is a unique method to have consumers share a brand message on their own initiative. The costs for this advertising type is dependent on factors such as day of the week, trends, holidays, etc. A sponsored filter on a regular weekday can already cost you $450.000 (!!).

4. Live story takeovers

Besides Sponsored Geofilters Snapchat offers another special opportunity to advertise during big events, such as the Golden Globes and the Superbowl. This happens within the section Live Stories. Within such advertisements, selected snaps of users that are related to this certain event are being displayed. Brands can perform a Live Story Takeover, which means that they can display a maximum of 3 advertisements within a Live Story. This is possible from an amount of $250.000. Very interesting, but moneywise only achievable yet for the international big boys. Also, mainly American events such as the Superbowl and Coachella are used for Live Stories, which does not make it interesting yet for most Dutch brands to make a big investment. Hopefully, this will change in the near future!

5. Discover Channels

This type of advertising is also not suitable for every brand. Only a select group of publishers and brands, such as CNN, MTV and BuzzFeed, are allowed to place articles and other items within this feed. The interesting part of Discover Channels is that Snapchat does not just show its audience the most popular or recent subjects, but completely leaves this up to specialized publishers. Obviously, this also has quite a price tag. From $50.000 you can advertise for one day.

For many companies the opportunity to advertise on a platform is an important reason whether or not to get involved with a certain platform. This also goes for Snapchat. However, brands can also take much advantage of the current features Snapchat offers. There are only a few brands that are active with an account, whereas you can already use it to interact with your audience. By already experimenting with Snapchat right now you can get ahead of your competitors. When the advertising opportunities become available in the Netherlands you can profit from the experience built.

Predicting the future

At this point Snapchat is innovating and expanding its advertising opportunities. In order to stay ahead of their competitors and to collect enough financial resources for this, they will have to allow more advertisers on their platform. Snapchat uses a different strategy than many other social networks. Instead of going for ‘Mass = Cash’ Snapchat chooses for a more exclusive – almost TV like – approach. This might mean that they mainly focus on big enterprises with big media budgets. An interesting happening that will definitely influence this is the planned IPO in 2017.

In anticipation of this IPO Snapchat will open an office in the Netherlands this year, where they will presumably focus on marketing and advertising sales in the Benelux and Scandinavia. This will probably have consequences for Dutch advertisers, as Snapchat is currently focusing their innovations and advertising opportunities on America. How cool would it be if the Netherlands becomes, next to America, one of the precursors and can experiment with new advertising types first?!

Even though Snapchat has lots of potentials, it is not the only social network that is innovating. Instagram already has extensive, accessible advertising opportunities and is battling Snapchat. For Instagram, it is relatively easy to make new features popular, as loads of consumers have an account already. For example, they recently introduced Instagram Stories (image on the left), a copy of one of the basic elements of Snapchat (image on the right). It obviously caused much criticism, but hey… imitation is the sincerest form of flattery. The fact that Instagram is way ahead of Snapchat when it comes to advertising means that they have to keep innovating to stay popular.

We expect Snapchat to stay popular on the side of Instagram, dependent of what Instagram will lay their focus on. Snapchat is focusing on content that disappears after a few seconds, whereas Instagram also creates a timeline where pictures and videos are available for a long time. In addition, there are always new platforms on the rise. An example is Snow, a photo and video app that is extremely popular in Asia. This platform offers more or less the same features as Snapchat. One big difference for users is that Snapchat offers 10-15 lenses and Snow over 100.

As long as Snapchat keeps innovating it will keep growing as a consequence, and will probably stay ahead on these types of competition. They have to come up with new features regularly in order to stay successful and unique while maintaining the current, successful features: ‘If it ain’t broke, don’t try to fix it’. We are very curious what will happen if they expand their advertising opportunities.

We will provisionally stay fans, and we definitely recommend brands to dive into the opportunities of Snapchat. There is still much to be gained there. Keep an eye on Snapchat, because they will be around for a while!

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