Advertising on Snapchat

Edi Moraes at Upbeat Agency shares a guide to Snapchat advertising costs

 

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?

 

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. 

 

Minimum ROAS (Return On Ad Spend) – With this strategy, you tell the Snapchat algorithm to aim for a minimum return on ad spend, allowing accurate data to inform spending. However it can impact privacy as purchase data is passed back to Snapchat. 

 

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. 

 

It’s also important to note that Snapchat costs can be influenced by a range of other factors. Competitor activity can drive up the price of ad formats. If you’re targeting a popular demographic, you’ll also likely to pay more. So, it’s a good idea to factor in price fluctuations when fixing your marketing budget and planning your strategy. 

 

Making your Snapchat budget go further

One of the best things about Snapchat ads is that you don’t need a huge budget to get started, allowing for easy split testing, audience segmenting, and the trialling of bidding strategies. So, the best thing you can do when starting is to go small and build your market insights, working out the best strategies for your business before you increase your marketing spend. 

 

You must also remember that quality is a crucial driver of Snapchat success—the better the quality, the more engagement, and the lower the cost. So, focus on creating well-researched, relevant, high-quality ads that appeal to your chosen demographic. 

 

You don’t need the big bucks to succeed with Snapchat advertising. You just need to focus on getting the suitable material in the right place. So, concentrate on your bidding costs and performance, build quality ads, and monitor delivery. The rest should look after itself. 

 

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Edi Moraes is a Media Buyer at the Upbeat Agency

 

Main image courtesy of iStockPhoto.com