Advertising is Integral to the Future of Snapchat

Some advertisers are reticent to risk dollars on Snapchat, but the network has a young audience and could become as indispensable to marketers as it is to its users.

Snapchat has experienced real growth since its launch. The photo sharing service was the fastest growing social network of 2014, investors and teens are flocking to the service, and more companies are trying to use the platform to connect with the next generation of influencers. In light of these challenges and continued growth, Snapchat CEO Evan Spiegel has vowed to turn the network into a real business.

With each successive round of investment funding, Snapchat has endeavored to bring its standards in line with larger networks. The company recently beefed up security, eliminated third-party apps, and even released its first transparency report in April.

Spiegel’s vision for Snapchat is not as a competitor for TV or internet advertising; Snapchat aims to offer something completely different. Spiegel views advertising as a part of the internet and social media experience, and not as something that exists to interrupt it solely to serve profit. He said to Bloomberg:

A lot of people look at Internet advertising as a tax on the system. That’s sort of discouraging if you care about making new products and especially discouraging if you feel like you can solve problems.

Bloomberg noted that one attempt to deliver sponsored content on Snapchat, has been rolled back since its inception. Initially the program charged advertisers $100 per 1,000 views — $750,000 for a single day long campaign — but now it charges closer to $20 per 1,000, according to advertising industry sources.

Scott Varland, creative director at the ad agency IPG Media Lab, noted that his clients have been unwilling to risk ad dollars on the relatively untested Snapchat. He added that Snapchat is more a destination for messaging, and not necessarily content.

Varland told Bloomberg:

I don’t think users go on Snapchat as a destination for content. They think of it as a platform to communicate with their friends. So unless [advertising] is integrated into messaging, I don’t see a huge value for brands.

According to Bloomberg, Spiegel is concerned that allowing advertisers to message users felt “too invasive.”

Snapchat has certainly risen to the challenges it has faced, with some success. Security has improved since last year and the investment dollars and users continue to roll in. As it refines its advertising model, Snapchat could become as indispensable to marketers as it is to its users.