Snapchat is the definition of app goals. At only five years old, Snapchat is the social networking leader with 1.65 billion users and an average 10 billion video views per day. But how does Snapchat, a company valued at $18 billion, make its money? Its not like you have to pay to sign up.
Snapchat makes its money by selling advertising spots to brands and companies. Most of these ads go straight to the discover page, which you’ve probably scrolled through once or twice. Even with Snapchat’s huge market, this discover page isn’t viewed as much as they would like. This makes some advertisers fearful of purchasing a spot. As an advertising push and attempt to make more revenue, Snapchat decided to go to its most popular feature to advertise: stories. A Snapchat story is a photo or video you post to your “feed”, which is visible to all your friends for 24 hours. Your friends’ stories appear under “recent updates.”
Snapchat is now selling spots that are inserted between stories, which is great for advertisers. However, as a user, there is really no way to avoid them. They do, however, work like any other story: they are short and can be skipped. The good news is that they are strictly occasional, so they don’t appear every time a friend posts a new story.
This is the first time that advertising spots can be bought via third party vendors rather than directly through Snapchat. These advertising spots are going to be very popular among companies and brands because all 1.65 billion users of Snapchat will have to view this ad, even if it’s just for a second.