How Does Snapchat Make Money

How Does Snapchat Make Money
How Does Snapchat Make Money

Started as a final project for a
design class at Stanford in 2011 who knows that Evan Spiegel’s this project
will bring revolution in social media platform. However, Evan’s classmates
believed it was a terrible idea to create a mobile app that permanently deletes
your photos or texts once you opened it.

 But who knows that this tiny idea will turn
into the billion-dollar company and become one of the most used social media
apps. Today, Snapchat
is one of the continually growing apps with its 150 million daily active users
and adding more new features to engage with their users.
If you are a newbie to Snapchat,
it lets users exchange messages that may include text, videos, and photos to
which they called “snaps”, and it automatically gets deleted once the
user opened it. If it is a public post, then it will last until the next 24
hours. But you can’t snap more than 10 seconds of video, that is a limitation.
In Feb 2019, Snapchat has
released its annual
in which it shows that they have earned $9.7 billion in just one
year. But how Snapchat will make this money through only one app? Well,
according to the annual report of Snap inc. Their 99% of revenues come from ads
while the remaining 1% comes from Spectacles. Spectacles are one kind of
sunglasses that comes with built-in cameras that sync with Snapchat.
How Does Snapchat Make Money
How Does Snapchat Make Money
Well, Like Giant social media
apps such as Facebook and Instagram, Snapchat also sells ad space on its app
through which it earns most of the revenue. But Snapchat has divided this ad
space into five things.
1.            Stories Ads
2.            Sponsored Lenses
3.            Discover Feed Ads
4.            Geo Filters
5.            Sports Partnerships
It seems interesting, right?
Let’s dig in more.

Stories Ads:

Most of the Snapchat earning
comes from this advertising space. It merely collects ads from publishers and
put in between your stories. Because while swiping stories, users are more
actively looking at their screen, such ads contain a higher engagement rate
among all the ad spaces. By keeping an average bid for a swipe-up ad action
just $1-3, more publishers are going for this 10-second full-screen video ad
for their business or niche.
How Does Snapchat Make Money
How Does Snapchat Make Money
They have also partnered with
different advertising companies such as 4C, SocialCode, TubeMogul, and Adaptly
to improve their revenue by nearly $1 billion before next year.

Sponsored Lenses:

One of the most used features is
their augmented reality filters that make your face look funny and chiller.
While using an app, you have probably come across such sponsored Lenses. Do you
remember that Taco Bell lenses? In the history of Snapchat, it was one of the
most viewed/used ads, and the Taco Bell spent about $750,000 to get 224M impressions
on their lenses.
So, If you are planning to create
such Lenses for your business, they have fixed per day charges, or you can use
their on-demand filters starting from $5 depending on the audio duration and
audience size.

Discover Feed Ads:

If you are Snapchat user, you
probably familiar with the Discover feed that can be accessible by swiping
right. This feed comprises of different feeds from 20+ leading publisher
partners such as MTV, BuzzFeed, CNN, DailyMail, and Esquire. Using the same mid
snap ads placement, they have created this discover section for monetizing and
earn more revenue. However, they have never mentioned their discover ads in
their reports. But as per Digiday, it costs around $0.15 per view. Because this
ad has a lower cost, it became the center of attraction for business as well as
celebs to place their Ads and interact with their new fans.

4. Geo

How Does Snapchat Make Money
How Does Snapchat Make Money
As the name suggests, Geofilters
are limited to a particular geographical location. Simply, swipe left from the
app after recording your Snap, you can quickly access all the branded
Before use Geo filters you have
to know that How
to create a snapchat Geo Filter
. Snapchat users can also buy geo-filters
straight from their website for particular events such as a wedding, party, or
can create free geo-filters for the community. To advertise or promote your
business using such a geo-filer, you can also create it via their website.
Recently, X-Men snap filters during its premiere so users can quickly purchase
tickets to the fiction movie, and it worked like a charm.

Partnerships & Spectacles:

In recent years, Snapchat is
continuously partnering with various organizations to promote their business or
individual events. One report
by AdAge
says Live Story is spending $400k to $500k to get more exposure
and reach a broader audience in no time. Apart from that to date, Snap inc has
partnered with many companies, including Adidas and Nike, as they can advertise
their product to sports fans.
As we have mentioned earlier, the
company also sells glasses called “spectacles” since 2016. Still its
not enough to earn more through these funky glasses, and yet they have $40M in
unsold spectacles.
So, this was Snapchat’s
spowerpack ad strategy to generate more revenue. Let us know what you are
thinking by commenting below.
Author Bio:
Name: Pooja shah
Bio: Pooja Shah is a Creative Writer and an SEO
expert at Auto Monkey. We provide an
original analysis of the latest happenings in the social media industry.
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