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

http://www.forbes.com/sites/larrymagid/2013/05/01/what-is-snapchat-and-why-do-kids-love-it-and-parents-fear-it/https://www.google.com/search?q=snapchat&source=lnms&tbm=isch&sa=X&ved=0ahUKEwjRjL2ty-PJAhWF0h4KHeyiCGEQ_AUICSgD&biw=1280&bih=752#imgrc=jz0q-y4w7_tlDM%3Ahttps://www.google.com/search?q=snapchat&source=lnms&tbm=isch&sa=X&ved=0ahUKEwjRjL2ty-PJAhWF0h4KHeyiCGEQ_AUICSgD&biw=1280&bih=752#imgrc=jz0q-y4w7_tlDM%3A

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)

https://www.snapchat.com/adshttps://www.snapchat.com/ads

The 3 Vs

Source: https://www.snapchat.com/ads

Evan Spiegel, co-founder & CEO of Snapchat

http://www.youtube.com/watch?v=9JYZqg0511Mhttps://www.snapchat.com/ads

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)

http://slicecommunications.com/the-evolution-of-snapchat/https://www.google.com/search?q=snapchat&source=lnms&tbm=isch&sa=X&ved=0ahUKEwjRjL2ty-PJAhWF0h4KHeyiCGEQ_AUICSgD&biw=1280&bih=752#tbm=isch&q=snapchat+cost&imgrc=YjTowlcHrgty-M%3A

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)

http://recode.net/2015/06/17/snapchats-making-some-pretty-serious-money-from-live-stories/https://www.google.com/search?q=snapchat&source=lnms&tbm=isch&sa=X&ved=0ahUKEwjRjL2ty-PJAhWF0h4KHeyiCGEQ_AUICSgD&biw=1280&bih=752#tbm=isch&q=cost&imgdii=nb-_WmSVXYMa8M%3A%3Bnb-_WmSVXYMa8M%3A%3Bj13pS_QiennpTM%3A&imgrc=nb-_WmSVXYMa8M%3A

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)

https://www.glassdoor.com/Salary/Snapchat-Salaries-E671946.htmhttps://www.google.com/search?q=snapchat&source=lnms&tbm=isch&sa=X&ved=0ahUKEwjRjL2ty-PJAhWF0h4KHeyiCGEQ_AUICSgD&biw=1280&bih=752#tbm=isch&q=snapchat+cost&imgrc=TTPnkEzKCqTtzM%3A

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/

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 companys 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

http://www.adweek.com/news/technology/snapchat-asks-brands-750000-advertise-and-wont-budge-162359

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

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/