Snapchat's new ad initiatives are designed to increase revenue
Snapchat, which counts 150 million daily active users, has announced a number of new initiatives designed to jump start the revenue stream for the company. Now, when you auto-advance through your friend's Stories, you will see a Snap Ad when you go from the end of one pal's Stories to the beginning of your next bud's Stories. Ten advertisers have agreed to test out these spots including Universal Pictures, Paramount Pictures, Verizon, Procter & Gamble, Warner Bros. and Express.
Snapchat users will soon be able to scroll up on an ad to install a promoted app, view a longer video ad, visit an advertiser's mobile website, or read an ad disguised as a short article. For advertisers, they will be able to use an API created to help them purchase long ad campaigns instead of having to physically negotiate a deal with Snapchat. Despite offering the API, Snapchat says that it will be able to monitor the quality of the ads to protect the app user's experience.
Snapchat will provide advertisers with metrics to help them determine which ads are working and which aren't This comes out of the messaging app's partnership with a number of analytical firms including Nielsen and Google.
According to Snapchat, its new ad platform results in as much as five times the click-through rate found on similar apps. According to MediaScience, Snap Ads get twice as many clicks as Facebook ads, and 1.3 times Instagram and YouTube ads.
Snapchat reported $33 million in revenue during the fourth quarter of 2015, nearly doubling the previous quarter's total. For 2016, estimates call for Snapchap to bring in $250 million to $350 million in revenue. That would be a nice increase from the $59 million in revenue that the company generated in 2015. The ultimate goal is an IPO to help provide an exit for the Venture Capitalists who have been opening their wallet to the company.