A $750k price tag for disappearing ads is rising more than a few eyebrows
(Ad Age) Recently Snapchat has started releasing ads on the disappearing video and photo app. The minimum spend for these ads is reported to be $750,000, a very step asking price that is leaving many in the advertising world wondering if it the social app is worth it.
It’s no question that Snapchat is growing with over 100 million reported users, and it’s very popular among younger audiences, a target that advertisers are constantly struggling to reach. The ads that run in Snapchat also require users to initiate them, which means you’re only getting an engaged audience as opposed to a passive view that most video and banner ads get. However, in an increasingly crowded environment, Snapchat still lacks many key features that their competitors can deliver.
The biggest issue appears to be reporting, or lack thereof. Snapchat fails to deliver basic information such as gender or age ranges, two main staples of any advertising target. In a digital world where big data is the name of the game it’s surprising to think that Snapchat can get away with charging huge minimums and not even deliver on basic reporting metrics.
There is something to be said for being one of the first to market though. When the Ouija Board movie came out, they released an ad on Snapchat which got a lot of attention. A Google search of “snapchat ouija board,” results in over 35,000 results and generated millions of social media impressions. However this won’t be the case for every advertiser.
Additionally, one of the biggest talking points for advertisers and agencies today is viewability. Many digital advertisers are looking to not only measure if their ads were actually viewed, but bill only on impressions that were in-view. Many large platforms and ad networks still lack the ability to do this, which is putting a strain on pricing and where brands chose to place their ads. If Snapchat can’t meet these kinds of requirements, it seems like it would be hard for many agencies or Snapchat themselves to justify why they still have a place in a brand’s advertising campaign.
All-in-all there is no doubt that Snapchat is an attractive platform with huge potential. However, the large price tag and lack of data means they are limited to only a handful of large advertisings that spend enough money that they can take a $750,000 risk. That seems to be just fine for Snapchat right now, but to court the rest of the advertising world to spend enough money to justify Snapchat’s $10 billion valuation, they are going to need to make some major changes to their platform and the advertising experience.