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New thinking, new technology for the creative sectors
A MediaTainment Finance supplement

Like Instagram, WhatsApp, WeChat, Vine and Pinterest, Snapchat wants advertising revenue. But for three-quarters of a million a day?

Snapchat, the multilingual instant messaging mobile app launched in September 2011, is charging advertisers US$750,000 a day. That is the new rate for brands seeking the privilege of reaching the service’s estimated 200 million young monthly active users worldwide.

It is a steep media buying rate for a service still categorized as a start-up. To give its audacity some perspective, the more established YouTube, with its 1 billion registered users, charges US$500,000 for a masthead ad, just below the navigation bar, at the top of the screen.

Disney’s ABC network charges a reported US$217,546 for a commercial around top rated US drama series Scandal; but the 30-second TV spot has more than half a century of usage in its favor.

Snapchat’s steep price could be because co-founder Evan Spiegel has gone down in tech folklore as the man who turned down the US$3bn in cash Facebook offered for the company in 2013. Its estimated value has since soared to US$10bn.

And at the end of January, it launched Snapchat Discover, which enables users to find video content in one click. With CNN, National Geographic, VICE Media and Warner Music Group licensing their videos, Discover should give Snapchat another piece of real estate to flog media to advertisers.

There are still no standardized metrics that allow brands to measure the effectiveness of using messaging apps that send photos and videos as part of users’ content. In the constantly evolving digital media business, most of the advertising space offered is still experimental. But they cannot be dismissed.

To continue reading this article and other coverage of technology disrupting the creative industries, download TechMutiny Issue No.9

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