Snapchat, the ephemeral messaging app favored by millennials, is becoming a more accessible advertising medium for marketers, but the cost of entry is still high.
Two sources who routinely buy ad placements on popular app platforms tell VentureBeat that the the minimum price to launch any kind of campaign at Snapchat is $100,000. That $100,000 price point is likely to be prohibitive for all but the largest national brands.
Why are brands paying? Because people view 6 billion short videos a day on Snapchat, the app has 100 million active daily users, and 63 percent of those fall into the highly coveted 18 to 34 crowd — the “millennials.” One report says brands are now spending five times more to market to millennials than to other demographics.
The good news is that the price of buying a presence on Snapchat has fallen rapidly over the past year, our sources agreed. Only a year ago, the minimum cost to advertise was seven times what it is now, or $700,000.
One other industry source believes the minimum cost has now fallen to below $100,000.
Lots of details are still unknown. It’s unclear exactly what the $100,000 buys on Snapchat. We do not know the full menu of ad products offered and their prices.
We know that brands can easily spend a lot of money on Snapchat. As we reported last month, brands can now buy “Sponsored Lenses,” or cute content that Snapchat users can choose to overlay on their videos, or “snaps.”
The Financial Times reported that a Sponsored Lens running during holidays like Halloween cost $750,000 per day. Re/code said the ad unit costs only $500,000 on regular weekdays and $550,000 on weekends.
Right now Snapchat is best for exposing brands to numbers of young adults, our sources said, and large media brands have the most to gain from the platform right now. Snapchat is less geared toward brands looking for performance marketing, i.e. click-throughs.
There’s every reason to believe that as Snapchat continues trying to demonstrate its money-making capabilities to investors, the cost of advertising on the platform will continue falling. Snapchat will also likely offer ad products that fit the various specific marketing objectives of more types and sizes of brands.
Snapchat didn’t respond to a request for comment on this story.