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How Snapchat Makes Money?

snapchat

Top millennial’s fun messaging app Snapchat with its 100 million active daily users has come a long way from their initial start back in 2011. The world is curious to know about how and how much Snapchat is making so let us share every bit of detail on it without much adieu.

To begin with the app has developed many new features to earn money and with these tweaks, the channel is assisting today’s top marketers to reach millions of viewers daily with their paid brand video ads and paid content on the app like never before. The company has projected its 2016 earnings to be between US$300 – US$350 million which is six times more compared to its last year projected earnings which were just US$50 million.

Money Minting Features of Snapchat

Source: pcadvisor.co.uk

Source: pcadvisor.co.uk

Exclusive Fun Features

Snapchat has the largest audience of 13 to 28 year olds from the generation Z group of users. One of the main reasons teens love Snapchat is its unique ephemeral feature of images self-destructing after 10 seconds or in less time as selected by the sender. Well perhaps all this 10 second of rush and haste may have made its users become super quick to respond to content both paid or organic which is great news for marketers.

Source: hongkiat.com

Source: hongkiat.com

Love of Teens

We know, you know everyone is using Whatsapp, Facebook and Google maps – parents, extended family, old friends and new mates! Whereas Snapchat is the niche that Teens wish for and since the last four years they have got their exclusive space on the channel. Teens are powerful influencers and the movers and shakers in more than one way and that is precisely the reason why this social media tech company is coming up with a strong IPO in near future with its coveted teenage demographic.

“Discover” Feature for Publishers

Currently 23 top publishers like CNN, Yahoo, National Geographic and People et cetera who are targeting their reach towards teenagers are getting their content discovered and featured daily on Snapchat with paid advertising. Snapchat could be charging anywhere around $100 CPM ( cost per thousand views) from publishers as per Recode and this brings us closer to unlocking Snapchat’s revenue source. With millions of views a day, it seems Snapchat’s growth is unstoppable.

It’s other business model is when a publisher decides to use Snapchat’s space for their own ads referred to as “In-Story Advertisement / Called Story Live” then Snapchat and the publisher splits profits. In a recent Adweek report, soon Snapchat is also opening its API (application-programming interface) to other marketers allowing them to create their own ads just like on other social media channels like Facebook, Twitter and LinkedIn. This is big news as for marketers as it will open up more opportunities for reaching the coveted teenagers group unavailable elsewhere.

Magazines, publishers and world’s best media houses are receiving millions of views from their paid videos and content. Snapchat despite been a fairly costly medium is being hugely adopted by game changers and not with much surprise, BuzzFeed CEO informed that the company receives 21% of their website traffic from Snapchat. The paid Discover videos and content (by tapping & holding on a Discover story) gets further shared by Snapchat users as “photos” which again leads to increased interactions.

geofilters

Source: latimes.com

GeoFilters and Lenses Feature

On the app, the sponsored branded Photo Filters have come of have very high traction of up to 20 second interaction among average users. In the past Snapchat has reported that its Gatorade’s Super Bowl lens and Taco Bell’s sponsored lens / filters (animated overlays) received 165 million views and 224 million views respectively.

Snapchat gets paid by sponsors and advertisers to have their own Geofilters (decorations of user generated photos and videos) which appear at specific locations.

Source: theappfactor.com

Source: theappfactor.com

Increased User Engagement With Great Features

One of the cool Snapchat feature allows users to take a photos / videos (or just access Photos on the phone) and the option to add those to Stories. Their stories are available for complete 24 hours / one full day even if they delete them. Snapchaters too can have their content available for one complete day!

Snapchat users enjoy many other features on the app. Despite the 10 second lifeline of the images, they can take a screenshot to save a photo followed by an alert going to the sender. As we know, alert system is set in place because to prevent misuse of the app among teens and adults alike.

Snapchaters can add captions, change the size of the text, change text color and choose to add from hundred of emojis available on the app. Just type in an address while chatting with a friend and the address will show up on a map. Users buy virtual stickers, send virtual stickers and send cash using Snapcash. They can send 10 second GIF using their front camera for Video notes if video is more of a thing likewise one can send audio snap too.

Users make video and audio calls to their partner, friends and family and they are live the moment they make the call. The recipient sees the user through the camera even without accepting the call like making a one-way video or audio call if other can’t decide to answer to your call right away. All these great features have let to huge teen interactions on this major social media app of today.

Wrapping Up

As it is obvious, Snapchat is very upbeat, current and always trying to innovate its features for better user experience. Marketers can’t help but are impressed with the app’s capability to provide higher user engagement and views. Advertisers are seeing real benefits and the company is destined to grow further with their constant tweaks. Your take away here is that, if other advertisers see the value of the app, it is time for you to start reaching the millions of users on Snapchat too!

Snapchat is one of the best evolved social media application in the hands of digital marketers today. However it requires in-depth knowledge of how paid advertising works on the channel. Only a professional digital partner with proper know-how, use of insights and right experimenting can take your Snapchat advertising to the next level.

eQTM admin

Quality | Timely | Marketing

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