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Is a Snapchat ad really worth $750,000?

Omar Akhtar
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Snapchat is cool, hip and currently has 100 million millennials and teenagers using it every month, but are you really willing to pay $750,000 to advertise on it?

The ephemeral-messaging app caused plenty of industry insiders to balk last week when Adweek reported it was charging a minimum of $750,000 for advertisers to place a single, disappearing ad on its platform. To put that in perspective, it costs about $200,000 less to place an ad on top of YouTube’s homepage for an entire day.

Here’s what you would get for $750,000. Snapchat places a link to an ad in the Recent Updates section of its app. That means it’s completely optional for the user to click on the link and view the ad. Once they've viewed it, it disappears, much like any other Snapchat message.

Snapchat is touting access to its much-coveted user base of 15-34 year olds, and the fact that unlike everybody else, its ads are unintrusive, which should technically make them more attractive. However, in a world of increasingly sophisticated marketing, Snapchat’s ads are painfully old fashioned.

Unlike Facebook, Twitter or even Instagram, Snapchat offers no targeting options. Aside from stats on how many people clicked on the ad, there's no other data on the viewers. That means no information on age, sex, location or any other identifying data points. Plus, Snapchat might place the ad on the phones of a million people, but there’s no guarantee that they’ll even see the ad, since watching it is optional.

Compare that to the range of granular targeting options on Facebook and Twitter. Even Instagram, which caters to much of the same audience as Snapchat at least guarantees that a certain number of people will definitely see your ad within their image feeds.

Snapchat is counting on the fact that it will be able to land a few big whales to advertise on its platform, rather than a wide range of companies willing to bid for space on its app, which makes sense in the short term. But moving forward, it’ll definitely have to build out better features for its advertising product (better visibility, more targeting, more data) to cater to the increasing demand of digital marketers. Or, it will have to lower its price to really start competing with Facebook, Instagram or other messaging networks for a slice of the ad revenue pie. Either way, if you’re considering advertising on Snapchat, it’s probably a better idea to wait and see before you break that budget.