The Snapchat offer that will run you $8.68 per second
Just recently, Snapchat—the mobile app that lovingly refers to itself as “ephemeral”—made a landmark announcement: It was going to start advertising. Gasp!
Like many social media entities today, the company and its platform is valued at a whopping $10 billion, according to The Wall Street Journal. That’s a lot of dough for a company that doesn’t really sell anything.
But, according to the Snapchat’s own sales deck:
“Understandably, a lot of folks want to know why we’re introducing advertisements to our service. The answer is probably unsurprising—we need to make money.”
The not-so-duh part, though, is the model the company has put together to sell ads/content and how much it costs. Here’s how it will basically work, again, according to Snapchat:
- An advertisement will appear in a user’s recent updates “from time to time.” (The ads will be native in format, meaning they will match the form and function of the platform, so they don’t look so “ad-ish.” Facebook and Buzzfeed are masters at this.)
- The user can choose to watch it or not.
- It goes away after 24 hours.
Seems simple enough. Now, for the pricetag. According to Ad Age, Snapchat is looking to collect $750,000 for one of these ephemeral, 24-hour ads. Considering a network TV spot can run $500,000, have the marketers at Snapchat snapped?
Perhaps not. It’s important to understand where, exactly, Snapchat fits in the marketing equation for many brands. I’ll give you a little background, just for context.
Two buddies—Evan Spiegel and Bobby Murphy— created Snapchat in 2011. Their inspiration? They wanted “a more personal way to communicate with each other.” Spiegel and Murphy’s idea caught on. And today, more than 700 million “snaps” are viewed every day on the platform.
How is Snapchat “more personal” for people? If Snapchat is about anything, it’s about deletion. You send a mobile communication to someone—a photo, video or message—and you give it a certain amount of time to be viewed before it deletes automatically. (Most people pick between 5 and 10 seconds.) The communication vaporizes, never to be seen again.
It’s the closest thing to a guarantee against social media faux pas, sexts going viral, or other awkward mobile phenomenon. What’s more, snaps get attention, because people know the messages are going to go poof any second now.
And for some brands, you might as well open the gates to marketing Heaven.
McDonalds, for example, was one of the first to sign up for Snapchat’s new, pricey proposition. It makes sense. McD’s is trying, desperately, to appeal to Millennials—who usually choose other, healthier places to eat. The fast-food megabrand ponied up the three-quarter million pretty quick.
So, a quick recap (Let’s call it a “Snapcap”): Pay a lot, talk to advertising-adverse Millennials, short lifespan for your ad, but they are native. Got it. Now, here’s what you don’t get:
Analytics – Right now, Snapchat is pretty limited with reporting, according to Ad Age. Brands will not know how many women vs. men saw the ad, for example.
No targeting – Ads are just put out there on the platform. You can’t target an age group, behavior, location, gender or anything else, like every other digital platform out there.
Unknown opt-ins – Snapchat boasts a lot of users and activity on its platform. But the company makes clear that it will not “put advertisements in your personal communication—things like Snaps or Chats. That would be totally rude.” Users, basically, have a choice to open and see the ad, and it’s hard to tell at this point how many will opt in. Snapchatters will, however, have to hold a button down to see content, so Snapchat will know that someone wants to see the ad and that he or she is looking at the screen.
Hmmm. It’s like selling someone a billboard, that won’t look quite so billboard-ish, but you don’t know where it is or who exactly will see it (except young people, broadly) and it will blow down after 24 hours. That will be $750,000, please…
If Snapchat is serious about advertising on its platform, it will have to fix its ROI story. But there lies the rub. Snapchat is truly a Millennial brand. And study after study shows that Millennials value truth, honesty and transparency from brands above all else. If they feel sold, they shut down or avert their coveted glances elsewhere. Snapchat will have to find a way to balance this—to “make money,” and still be true to its constituency.
Or, it will go the route of Facebook. Moms and grandmothers will get on the platform and scare the Millennials away to something else.
– Andy Badalamenti is the creative director for CI-Group