At one point Snapchat sold one-day ads for as much as $750,000, an inaccessible price point for many companies. The app has since lowered its prices and its reach and format is becoming an advertising hit.
The youthful Snapchat recently overtook social media standout Instagram in an important statistic: the amount of time users spend on the app. And in a recent poll of teenagers, Snapchat narrowly beat Instagram as the respondents’ personal favorite app, 28% to 27%. Snapchat is used by 37% of the 18-24 demographic, so for marketers hoping to reach the youngest adult segment (and those even younger than that) the messaging-oriented platform is indispensable.
Snapchat’s leveraged position as an advertising medium is without question. Snapchat ads are seen between 500,000 and one million times per day, the platform logs 10 billion video views a day – as opposed to 8 billion for Facebook – and nearly one quarter of advertising executives plan to advertise on the app in 2016.
It is wise, however, to understand the the $18B+ valuated company’s advertising program before jumping in with a big spend. Every social platform has its own audience, sensibility and strengths in terms of the online interactions to which it most caters, so huge numbers of youthful users and engagement time spent doesn’t necessary equal revenue increase for advertisers. In that regard, Snapchat can be somewhat of a mixed bag.
Snapchat’s real-time content creation and consumption model favors advertisers. Because snaps have to be sent out quickly and read upon receipt, the platform’s users constantly crave more short-form content. And because snaps “self-destruct,” so to speak, users pay close attention when viewing. Snapchat also isn’t plagued with fake, spam-type content that other platforms sometimes encounter.
Vertical videos, which are shot in a tall, narrow aspect rather than the wide aspect of television, find a very warm reception on Snapchat. Realizing that its users overwhelmingly prefer to keep their phones in the standard up-and-down orientation, the app has urged advertisers to create their videos vertically and the results have been positive. In fact, vertically shot ads are nine times more common than horizontal ads.
The flip side of this, however, is that conventional, horizontal ads – still the overwhelming majority of ads made- are faced with a disadvantage on the platform and thus advertisers are forced to shoot ads in a new way, and those ads end up with very limited distribution because few other apps and no television channels display from that angle.
Another powerful plus is Snapchat’s collaboration with Nielsen, in which the veteran market research firm measures the social network’s audiences for 3V ads – full screen ads viewed by choice within Snapchat’s curated and premium environments – on mobile devices. Nielsen Digital Ad Ratings will allow Snapchat to provide mobile audience reach, demographic composition, frequency and gross ratings points, all metrics comparable to those reported for television and the rest of the digital space.
There are some data downsides, though, as Snapchat grows. Platforms like Google, Twitter and Facebook provide more detailed information about the types of people viewing ads, getting as specific as occupation, household income and previous content viewed. At the moment, even with Nielsen’s help, Snapchat’s user data doesn’t share that depth.
And while Snapchat enjoys the reach of its very young audience, it’s not the right consumer base for every brand. There are many products for which Snapchatters are a negligible or nonexistent customer base.
While Snapchat has undeniable potential – and a tremendous measure of success already – in the advertising arena, the youth-oriented social network still has some work to do to successfully bring together bottom-line oriented advertisers and a demographic that constantly adopts new media platforms.