This month Snapchat announced plans that they’re going to start charging brands the astronomical figure of $750,000 or about £500,000 for ads on the platform per day. For this amount of money brands get to show an ad to the social networks youthful and teenage audience…which will promptly disappear in 24 hours. So let’s break this down further. That means a brand would be paying $31,250 an hour, or $520 a minute or $9 a second. For me the figure that is most telling is how much brands are paying a second, as Snapchat ads, stories and messages only last up to 1-30 seconds. So if you’re posting an ad that lasts 30 seconds, you’ve just coughed up $270! Of course there’s no guarantee that the recipient will see out the whole ad, as they might just delete it, thus money wasted!
The other drawback of Snapchat’s ads, if the cost hasn’t already made you faint, is the fact you can’t target them to specific users. So it literally is a mass Snapchat message with no personalisation or anything. I mean for something generic like food this might be ok, but for something specific such as womens clothing, I personally don’t really want to see that (my days of wearing womens clothing are behind me). So the fact you aren’t able to target is a big issue. But I guess the cost is the reason for this. If Snapchat decides to release a targeted ads system, the cost I presume might be lower as you are hitting fewer users. Although it might actually be higher as you’re targeting more specifically!
The question to ask is why and how can Snapchat ask for so much from brands. One of the reasons is that it’s one of the fastest growing apps and social networks around with over 30 million users and this isn’t showing any signs of slowing down as more people sign up and brands look to exploit it. Also there’s a high value to get ads to people’s smartphones and through Snapchat’s ads brands can achieve just this. That’s because when you receive the snap, this is the only ad you see, as it’s not like a website page with loads of banner ads, it’s one ad that takes up your screen. Some might compare this to Instagram’s ad strategy too.
Is there actually any benefit in paying this amount of money? I mean is there actually any value in it, will you get a decent return or any if that. It’s quite hard to determine the ROI of these ads, and a lot will depend on the call to action. If it’s ‘opens’ then this isn’t really a great metric although clicks or website visits/sign ups might be a better determinant of success. Either way it appears Snapchat hasn’t really thought about this yet, nor really has any brand.
So only time will tell whether brands pay the handsome sum of $750,000 for an ad, or will Snapchat rethink this cost strategy. Thanks for reading and please do comment on your views of Snapchat’s ad cost. In the meantime, please do follow my blog and me on Twitter @DigitalStuart for more digital marketing and social media news.