Social media has opened up a whole range of advertising opportunities for businesses. But Snapchat has been an underused resource. Providing a unique platform for advertisers to connect with diverse audiences, it holds the potential for innovation, creativity, and intelligent targeting. And the right strategy can lead to significant revenue streams within new customer segments.
But before you invest, you need to understand the costs you may be facing and how to maximise the results of your investment.
Are Snapchat ads worth doing?
There are a number of things that Snapchat does well, which means that if you can get the formula right, advertising can be a worthwhile exercise. Here’s why.
The reach. Snapchat is widely known as a youth platform. But while 39% of users fall between the ages of 18-24, the platform has diversified in recent years, and 36% of its 347 million monthly active users are now aged between 25-49, significantly opening up the platform’s market potential.
Ad formats. Snapchat enables brands to use a range of formats for their advertising – not just image and video, but AR experiences and branded filters, which can deliver impressive engagement.
But how can you determine if the ROI will be worth the expense?
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How to measure the costs of Snapchat ads
Like other social platforms, Snapchat ads work on a goal-based bidding system. This means the platform optimises your exposure in line with your campaign objectives. Then you are billed on a cost-per-thousand (CPM) basis – in other words, charged for every 1,000 impressions delivered, with the Snapchat algorithm working to target your ad towards the users most likely to convert.
It sounds fairly simple, but there are other factors to consider, including quality. The lower the quality of your ad, the more you will pay to have it featured in a prime position.
Brands with a larger budget can also purchase specific ad space from Snapchat, which is a much more costly option.
Understanding goal-based bidding
There are four main types of bidding strategies available on Snapchat, each built around a slightly different way to achieve your objectives
Auto Bidding – Auto-bidding allows the Snapchat algorithm to bid on your behalf, dictating how much you’ll pay for impressions.
Target Cost – This enables you to define an average Cost Per Action (CPA) for your ads, which gives a target for the Snapchat algorithm to aim for.
Max Bid – Here, you set a maximum bid cap on how much you’re willing to pay for impressions.
How much do Snapchat ads cost?
There is no single answer to this question. While the average Snapchat CPM is £2.23 (much cheaper than many competitors – Facebook’s average CPM is £3.87, for example), with a daily minimum spend of £3.78, ad space can range from £2,266 per month to as much as £528,811 per day, depending on the format and the season.
SOURCE: BUSINESS REPORTER