It is has widely reported that Snapchat has started rolling out advertising to its app. The most shocking part of this story is the price advertisers will have to pay so they could be seen by Snapchat users on their ‘recent posts’: in excess of $700,000 for it to last one day. This seems a staggering amount of money for something that may not even be viewed by people who use Snapchat. Putting this aside, I thought the topic of Snapchat including advertising on their app was interesting enough to make into a post. 

Why Advertising?

I think it is quite clear why Snapchat decided to implement advertising into their app. There are over 100 million active users of Snapchat (November 2014) which is absolutely staggering. Of course, the first step to advertising is having the traffic to advertise to which Snapchat obviously has. The only problem is that introducing advertising to an app may give the app users a reason to stop using it. After all, when it comes to creating websites, the general rule is to start new websites off with advertising so you don’t have to let your audience adjust when you later introduce advertising.

Anyway, with the audience Snapchat are hitting, it begs the question why they didn’t advertise sooner rather than later.

Why the High Price?

The one thing about Snapchat that they have over any other type of advertising is their target audience. The majority of users that use Snapchat are teenagers. Teenagers are notoriously difficult to advertise to because:

1. They have a very low attention span.
2. They are difficult to win over.
3. It is difficult to advertise just to teenagers.

This makes Snapchat a gold mine for advertisers. They have teenagers, in their millions, to advertise to. Snapchat is pricing their advertising not only for how far the advert will span, but because of the specific audience they can advertise to.

It just goes to show that people are willing to pay big bucks for advertising to the right market! Take pay per click advertising for example. The highest paying PPC keyword in 2009 was ‘auto insurance’ which was worth a staggering $55 and that is just for a click!

Just so we can all learn a little from this article, below are the main factors that will affect the price of advertising:

• The audience being advertised to
• The target market category being advertised
• Location
• Competition

This is why PPC makes Google so much money. They don’t set a certain price for each and every keyword: they let the competition between advertisers set it. This is where Snapchat are different, I guess. Instead of letting competition dictate the price, they have set out the price automatically. In all fairness,this is probably the best idea for Snapchat since they are probably not going to get enough competition to drive up their price on advertising to reach the target price they have already set.