Snapchat lowers its price for ad placement by a whopping $600,000, but even with the slashed down cost, only several major brands will probably be able to get in on the action.
Just a year ago, it was set to $700,000, and now it has been reduced by $600,000, but the $100,000 entry isn't really an invitation to brands to participate.
With more than 100 million active users on a daily basis, it's no mystery why brands want to get a piece of the Snapchat pie, not to mention that 63 percent of those users are classified as "millennials," which is the coveted demographic.
Investors are concerned about Snapchat's $16 billion valuation, as it doesn't seem to have shown a regular income yet. Take Fidelity Investments for instance. The mutual fund firm cut down the value of its stake in Snapchat by 25 percent back in September, making the company seem incapable of delivering advertisers' expectations.
Brands that advertise on Snapchat are wondering whether the steep price is worthwhile when the company is behind when it comes to targeting specific consumers and measuring ads' performance.
"If Snapchat doesn't get that figured out, they're in trouble," Nick Godfrey, chief operating officer at digital strategy agency RAIN, says.
Despite Snapchat's lack of social media coverage, General Electric inked a deal for a second ad campaign to run during the holidays for two weeks.
"I'm looking forward to Snapchat coming out with a little more in-depth analytics," Sydney Williams, manager of global social media marketing at GE, says, noting that the figures on the platform are not something the company can simply "walk away from."
As of right now, Snapchat is the best platform for brands looking for some massive exposure, as millions of young adults use the messaging app every day.
Analysts believe that the price will continue to fall as the company attempts to prove its profit-making abilities to investors. An industry source even believes that the minimum cost has dropped below the $100,000 price point already.
Photo: Maurizio Pesce | Flickr
