Snapchat and Advertising
Katherine Angst, Carla Caban, Brianna Hanson, & Andrea Mosk
What is Snapchat?
- Mobile app that allows users to capture videos and pictures that self destruct after a few seconds
- *with the exception of screen captures*
- 3 Areas of Snapchat- Live Story- Local Story- Discover
Source: http://www.forbes.com/sites/larrymagid/2013/05/01/what-is-snapchat-and-why-do-kids-love-it-and-parents-fear-it/
Figure 1. iMore. Snapchat Mobile Image
Who is Using Snapchat?
- More than 60% of U.S. 13 - 34 smartphone users are Snapchatters
- Over 100+ million daily active Snapchatters and growing
- 5+ Billion video views every day
Source: https://www.snapchat.com/ads
Figure 2. Snapchat Monthly U.S. Users. (Snapchat Ads)
The 3 Vs
Source: https://www.snapchat.com/ads
Evan Spiegel, co-founder & CEO of Snapchat
Snapchat Timeline
- Snapchat was first launched in July 2011
- Personal MyStory feature was released in October 2013
- In June 2014 direct chat, filters, and event stories were introduced
- October 2014 saw the first Snapchat Ads
- The Discover page was released in January 2014
Source: http://slicecommunications.com/the-evolution-of-snapchat/
Figure 3. Timeline of Snapchat. (Timeline)
Snapchat Features
- Filters- Face filters “Lenses”- Geotags- Sponsored Filters
- Live Story- Local Story- Company/Celebrity accounts- Ads on Live Story- Discover page for brands
Figure 4. Buzzfeed QR Tweet, Screen Capture, December 15, 2015
Costs for Advertisers
- 2 cents per per view for 10 second ad- Approximately $400,000 worth of ad space for
20 million views
- 4 ad spots per story- Price changes depending on placement, more
expensive at the beginning
- Either choose to advertise within an event or sponsor a Snapchat story which prompts Snapchat to make a story
Source: http://recode.net/2015/06/17/snapchats-making-some-pretty-serious-money-from-live-stories/
Figure 5. Idea Money. (Image)
Costs for Snapchat
- Unlimited space- Employee salaries
- Software developers ($137,416 a year)- Content analysis ($29.67 an hour)
- Privately owned company- BuzzFeed and People and other publishers
featured on the Discover page get the channel space for free in exchange for their content, and they share ad profits with Snapchat.
Source: https://www.glassdoor.com/Salary/Snapchat-Salaries-E671946.htm
Figure 6. Snapchat Money Logo. (Logo)
Costs for Users
● Snapchat is a FREE app
● $.99 for replays
● 30 lenses for $.99 each, only 7 free
Figure 7. Screenshot by Katherine Angst 11.22.15
Source: http://money.cnn.com/2015/11/13/technology/snapchat-lenses-rage/
Why Brands Advertise on Snapchat
Paid - Brands pay for live stories, filters, ads on stories and discover pages
Owned - Engaging content and stories from the company’s account
Earned - Users sharing what they do, snapchats pulled from user generated content for live/local stories
Figure 8. Screenshot by Katherine Angst 12.16.15
Drawbacks
Snapchat has limited reporting capabilities
- Can't tell how many men vs. women saw an ad- No age breakouts- Currently limited targeting
High cost per ad
Source: http://www.adweek.com/news/technology/snapchat-asks-brands-750000-advertise-and-wont-budge-162359
Figure 9. Screenshot by Katherine Angst 11.27.15
Future of Snapchat
- $16 billion valuation (Wagner)- Assuming a $1 billion ad revenue source
- Facebook and Google offered Snapchat $3 billion and $4 billion respectively (“Inside Snapchat”)
- Applying for an IPO- 8 rounds of equity funding (“Inside Snapchat”)
Souce: http://www.adweek.com/news/technology/4-big-developments-show-why-snapchat-was-2015s-buzziest-platform-168570
Questions?
ReferencesAds • Snapchat. (n.d.). Retrieved December 15, 2015, from https://www.snapchat.com/ads
Johnson, L. (2015, December 15). 4 Big Developments That Show Why Snapchat Was 2015's Buzziest Platform. Retrieved December 16, 2015, from http://www.adweek.com/news/technology/4-big-developments-show-why-snapchat-was-2015s-buzziest-platform-168570
King, H. (2015, November 13). Why people are freaking out at Snapchat today. Retrieved December 17, 2015, from http://money.cnn.com/2015/11/13/technology/snapchat-lenses-rage/
Magid, L. (n.d.). What Is Snapchat and Why Do Kids Love It and Parents Fear It? Retrieved December 13, 2015, from http://www.forbes.com/sites/larrymagid/2013/05/01/what-is-snapchat-and-why-do-kids-love-it-and-parents-fear-it/
Miranda, C. (2015, February 9). The Evolution of Snapchat | Slice Communications - Philadelphia. Retrieved December 16, 2015, from http://slicecommunications.com/the-evolution-of-snapchat/
Sloane, G. (2015, January 14). Snapchat Is Asking Brands for $750,000 to Advertise and Won't Budge. Retrieved December 13, 2015, from http://www.adweek.com/news/technology/snapchat-asks-brands-750000-advertise-and-wont-budge-162359
Snapchat Salaries. (n.d.). Retrieved December 16, 2015, from https://www.glassdoor.com/Salary/Snapchat-Salaries-E671946.htm
Wagner, K. (2015, June 17). Snapchat Is Making Some Pretty Serious Money From Live Stories. Retrieved December 15, 2015, from http://recode.net/2015/06/17/snapchats-making-some-pretty-serious-money-from-live-stories/
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