Advertising on Snapchat: What's the spend?

Slow and steady wins the race?

Despite cementing its place as the fastest growing social network with over 150 million daily users, Snapchat took a slow and steady approach to monetizing their platform.

Four years after its launch in 2015, Snapchat generated $0 in revenue. In comparison, Facebook had already generated $272 million in revenue within 4 years of operation (2008). See the infographic here.

For awhile, Snapchat seemed a bit behind the advertising curve, but they're catching up...fast.

With a fleet of new advertising features released by the platform, it seems there is opportunity across a wide budget spectrum-- from $5 custom geofences to $750,000 sponsored lenses.

Let's look at the advertising options, starting with the least expensive:

Geofilter

In 2016, Snapchat introduced OnDemand Geofilters, allowing users within a designated area (geofence) to adorn their snaps with branded images (see Bernie Sander's NYC geofilter).

So, even though usage is limited to attendees at your event, the potential audience reach for those who view Snaps featuring your custom filter is unlimited.

Snapchat even provides .psd templates to ensure your assets meet sizing / dimension requirements.

So, is it expensive? It depends on a few factors such as the size of the geofence and the length of time the filter will be live.

In comparison to other advertising features available, this is the most cost-conscious option on the app.

Let's say you're a local animal shelter hosting a pet adoption event at a neighborhood park covering about 23,000 Sq Ft (Snapchat geofences must be at least 20,000 Sq Ft). Ordering a custom filter for a few hours will only set you back $5. Not too shabby.

On a larger scale, let's say you're a marketing manager for Houston's largest convention, The International Quilt Festival (Not kidding). Purchasing a custom filter to run the span of this 3-day event in a larger convention space comes in at a little over $3,000.

Snap Ads

If you're looking to implement a more comprehensive advertising strategy, Snapchat also offers Snap Ads, traditional mobile video ads with an interactive twist. While this option reaches a larger audience than a custom geofilter, the price tag is a bit steeper.

Costs vary from 4 cents a view for 3Vi (vertical video views and interactive) ads that are clickable with stronger CTAs, like downloading an app or swiping to watch a longer video. Non-interactive video ads are reported to ring in at 2 cents per view. On average, Snap Ads can amount anywhere from a $20-40 CPM (cost-per-thousand impressions).

(Netflix used Snap Ads to promote their new original series "Love")

Discover

Last year Snapchat announced "Discover", a partnership with major media publications like Buzzfeed and National Geographics. While it's unclear if this partnership requires a hefty "membership fee" , featured companies have invested in full-time staff dedicated entirely to creating Discover content.

(Source: Storage)

With publications like Cosmopolitan reportedly boasting 19 million monthly views. Discovery is most definitely here to stay. The question is: will Snapchat open this vehicle for viewership to brands outside of media outlets?

Social Media advertising will make up 16% of digital ad spend by 2017

Advertisers are spending big bucks on social media. In a 2015 report from eMarketer, an estimated $23.68 BILLION was spent on advertising across social networks. By 2017, that number is expected to reach $35.98 billion, claiming 16% of digital ad spend globally.

Bottom line, brands have moved past initial hesitation to develop a budget around social media. It is no longer an afterthought but a front runner.