A while ago, we reported that Snapchat was asking for a little less than a million dollars to allow to brands to advertise on its platform. Yes, “millennial” reach costs a lot, but we have a feeling that the app has had a huge markup as well.
Things change, times change and advertising fees change, as it seems. According to multiple sources, Snapchat has decided to slash its access fee by more than half a million dollars. Right now, advertisers will need only $100,000 for a placement on the precious platform.
The move raises suspicions, but reveals a strategy as well. For starters, one can only assume that Snapchat could possibly be facing revenue problems – hence, lowering its ad cost. We could easily cross out this possibility though , given that many brands already pay for ads on Snapchat (see Samsung) and secondly, keeping the prices high allows space for better control over the quality and quantity of the promoted content.
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We could also argue that the new advertising fee is not accessible at all to most, and we would be right to do so. However, it’s pretty clear that Snapchat is not aiming attracting money from SMBs at this stage. It’s merely going for the “bigger fish” in the brand pond – those that are willing to risk, but not spend their entire budget on a (still unknown to many) social platform.
So, what’s the deal? What we could safely say is that Snapchat is following Instagram’s tested and approved technique. A couple years ago, Instagram was not accessible to brands for advertising. Following its acquisition by Facebook, Instagram started partnering up with specific brands – with big bucks – that could afford to put their name on the platform. The threshold was gradually lowered and now Instagram ads are buyable directly through Facebook’s self-serve platform.
Sound likes an acquisition on the way?
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