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Snapchat Inches Closer to IPO With New Ad Strategy
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Snapchat, Inc. is inching ever so closer to an IPO with a massive change in its advertising strategy. The next-big-thing in social media announced today that it will place commercials in a more accessible location and simplify the ad-buying process.
Snapchat announced Monday that eight companies now have access to its automated ad system, meaning that the need for Snapchat itself to be involved in the creation process will be significantly reduced. While Snapchat will still evaluate all ads before making them live, these eight companies should be able to make the process much more efficient.
Snapchat also has a variety of advertising and creative partners that it will connect people to. Its advertising sponsors will help brands connect with users based on Snapchat’s targeting options, and its creative partners will help companies create appealing video ads.
Furthermore, Snapchat also said that advertisements will begin to appear between users’ Stories. The video ads, which will be 10 seconds or less, will only appear between individual Stories and will not interrupt the timeline that one user creates.
Snapchat will also make it easier for users to connect with the companies that advertise on the platform. A Snapchat user can now swipe up while a sponsored video is playing to experience additional content, including the company’s website or a long-form video.
These moves to simplify the buying and creating process, while also expanding visibility, clearly show that Snapchat has doubled down on generating new revenue. With the help of private equity firms, as well as public companies like Alibaba (BABA - Free Report) and Yahoo , investors have already valued the company at around $17 billion.
Nevertheless, Snapchat has a long way to go if it wants to catch the current king of social media, Facebook . Although Snapchat is growing, it’s only generating a few hundred million in revenue this year and is far from turning a profit.
Snapchat may have some advantages, however. According to a recent study by MediaScience, Snapchat advertisements come in close to television in visual attention. In fact, Snapchat video ads command nearly twice as much visual attention as Facebook, 1.5x the visual attention of Instagram, and 1.3x the visual attention of Alphabet Inc.’s (GOOGL - Free Report) YouTube.
The same study also found that Snapchat video ads tend to deliver a “significantly stronger” emotional response from users and were twice as effective in creating a lift in purchase intent compared to the other platforms.
Now that Snapchat has made it easier for companies to access its efficient advertising platform, it could be the start of a new king of the social media world.
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Snapchat Inches Closer to IPO With New Ad Strategy
Snapchat, Inc. is inching ever so closer to an IPO with a massive change in its advertising strategy. The next-big-thing in social media announced today that it will place commercials in a more accessible location and simplify the ad-buying process.
(Also Read: Inside Snapchat: The Best Upcoming Tech IPO?)
Snapchat announced Monday that eight companies now have access to its automated ad system, meaning that the need for Snapchat itself to be involved in the creation process will be significantly reduced. While Snapchat will still evaluate all ads before making them live, these eight companies should be able to make the process much more efficient.
Snapchat also has a variety of advertising and creative partners that it will connect people to. Its advertising sponsors will help brands connect with users based on Snapchat’s targeting options, and its creative partners will help companies create appealing video ads.
Furthermore, Snapchat also said that advertisements will begin to appear between users’ Stories. The video ads, which will be 10 seconds or less, will only appear between individual Stories and will not interrupt the timeline that one user creates.
Snapchat will also make it easier for users to connect with the companies that advertise on the platform. A Snapchat user can now swipe up while a sponsored video is playing to experience additional content, including the company’s website or a long-form video.
These moves to simplify the buying and creating process, while also expanding visibility, clearly show that Snapchat has doubled down on generating new revenue. With the help of private equity firms, as well as public companies like Alibaba (BABA - Free Report) and Yahoo , investors have already valued the company at around $17 billion.
Nevertheless, Snapchat has a long way to go if it wants to catch the current king of social media, Facebook . Although Snapchat is growing, it’s only generating a few hundred million in revenue this year and is far from turning a profit.
Snapchat may have some advantages, however. According to a recent study by MediaScience, Snapchat advertisements come in close to television in visual attention. In fact, Snapchat video ads command nearly twice as much visual attention as Facebook, 1.5x the visual attention of Instagram, and 1.3x the visual attention of Alphabet Inc.’s (GOOGL - Free Report) YouTube.
The same study also found that Snapchat video ads tend to deliver a “significantly stronger” emotional response from users and were twice as effective in creating a lift in purchase intent compared to the other platforms.
Now that Snapchat has made it easier for companies to access its efficient advertising platform, it could be the start of a new king of the social media world.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>