This weekend, Snapchat started hosting sponsored content for the first time, and the first official ad was a commercial for the Universal Pictures feature film Ouija. Snapchat is, however, kind of late to its own party: There has been plenty of advertising on Snapchat for some time now.
When new communication apps and styles open up, marketers are usually the first to try and figure out a new system to advertise to each demographic. There are even handy flowcharts to detail if Snapchat is the best focus for your advertising budget.
Advertising is just one of the many ways that a service can monetize, and this seems to be the standard business model for most social networks. Other revenue solutions like subscription models or data mining can drive users away, and Snapchat certainly doesn’t want to drive away users now that it’s backed by venture capital and has market presence.
The ads themselves are not that important. What is important is the ability to ignore these ads and continue using the service. According to Snapchat CEO Evan Spiegel, the ads are “Not fancy […] not targeted.” How much revenue these ads will generate is yet undetermined, but that might not be as important as the message sponsored posts send.
The message is that Snapchat will now have the ability to generate revenue independent of VC funding, or cash provided by any acquisition. If Snapchat hopes to maintain what seems to be a relatively fragile position in the market, appearing to be on the same level as others is at least as important as the money generated from advertising and sponsored content deals.
Marketers already see the potential of Snapchat as an advertising platform, and some like Taco Bell and Funny or Die are receiving substantial engagement on messaging app platforms compared to other services like Twitter. If this engagement holds true for sponsored advertising, Snapchat just may become one of the most lucrative gems in town.