How much is too much for a short-lived ad on a social media site?
Snapchat thinks it knows: $750,000 a day. But the photo (and now video) messaging site is experiencing some blowback from all but the most well-heeled advertisers.
“Snapchat is asking brands for $750,000 a day for its new ads, according to multiple industry sources who have heard the pitch, and some say that’s too expensive for the young app,” writes Garett Sloane in AdWeek. “The messaging app with a heavy video focus has promoted itself to the ad world as a TV-style commercial space with millions of viewers a day. Snapchat only started running ads late last year, with its first coming from Universal Pictures for the film Ouija.”
Some deep pockets marketers — McDonald’s, Samsung, Macy’s, and Electronic Arts, for example — have been willing to pay the hefty price. These early adopters bought “Snaps” that show up in member feeds.
One agency exec explained that Snapchat is refusing to budge.
“They [Snapchat] have minimums, and they are very firm on them,” he said. “From a monetization perspective, they are looking for fewer, bigger, better.”
It’s not a game for the risk averse. But companies like McDonald’s, which promoted its “Love Is Endless” commercial on Snapchat, appear drawn to the site, which can snag tens of millions of viewers a day. WIth 100 million average monthly users, Snapchat also works for Universal, which will re-up to buy a second ad for the film “Dumb and Dumber To” (yes, the “to” is grammatically incorrect, which is the dumb and dumber point).
“We have clients for whom Snapchat works really well,” the agency exec noted. “It’s good for a product launch or a rebranding like McDonald’s has done.”
Will Snapchat’s price tag put off would-be advertisers? Time will tell. Word is that a masthead ad on YouTube goes for a mere $500,000. There are also analytic issues the site needs to deal with, say industry insiders, including demographic breakdowns (age/gender/other) of ad-viewing users.
“I’m a big fan of Snapchat, but they are going to market with rates that are significantly higher than what’s competitive out there,” suggested one top executive at a major brand. “It is difficult to go forward with a deal with Snapchat at the prices they are quoting.”