Of all the social media platforms out there, Snapchat, with its disappearing pictures and video, is the quintessential millennial platform. It is fast paced, streamlined and connects people to one another. With that in mind, what does it offer advertisers?

With its 150 million daily users and views of over 7 million per day for pictures plus 10 billion daily mobile videos views, Snapchat presents a highly desirable audience for brands both big and small.

Interested in learning more? We’ve made it a snap for you to decide if the social media platform works with your business.

Related: The complete list of Snapchat ad specifications.

Quick Statistics:

Pros

Snapchat is a quick way to engage a massive, influential audience

First, Snapchat’s audience is comprised primarily of millennials who hold a purchasing power of $200 billion. At a whopping 76%, the app has the sixth largest concentration of millennials among mobile users and reaches 41% of all 18 to 34 year-olds in the U.S. each day.

Also, unlike other social media, it boasts a highly engaged audience with its highly interactive structure. 65% of Snapchat users create personal content, snaps and stories, plus Snapchat holds an average message open rate of 75-80%.

Content is never lost

It’s difficult to ignore snaps, and one can’t simply hit “read all” and have the notification go away. A user needs to open and view the snap which in turn yields a higher viewing rate. Additionally, due to the way Snapchat is structured, snaps are never lost in a timeline or subject to an algorithm which filters the content you see.

Cons

Lacks reliable tools for measuring return on investment (ROI)

Snapchat rolled out of beta its third-party measurement platform in late October 2016. Snaplytics, the long awaited platform pulls marketing insights from Snapchat accounts. However, compared to other platforms like Facebook and Twitter, Snapchat’s offering is less than par, lacking an application program interface (API) protocol. For example, a brand’s daily stats disappear after 24 hours and the platform makes it difficult for brands to be ‘found,' leading to go-arounds such as embedding links to Snapchat via the brand’s official Facebook or Twitter page.

Low adoption rates for older consumers

Snapchat may be popular with millennials and post-millennials (Generation Z) but the two groups with the greatest purchasing power, baby boomers and Generation X, have largely eschewed the social media platform. According to 2016 statistics, only 14% of users older than 34 years old engage with Snapchat but have excessive spending power as shown by the baby boomer’s controlling $ 7 trillion of U.S. wealth and Generation X’s 31% of total U.S. income.

With such deep pockets, an advertiser must consider the demographics, behaviors and interests of their best customer to see if this is a good platform to meet its goals for optimal ROI.

Available advertising formats for Snapchat

Now that we've looked at the pros and cons of Snapchat, let's take a look at the platform's advertising formats. First, Snapchat ads are primarily developed in-house by the Snapchat team. While this collaborative arrangement improves the overall ad quality for the platform, it does drive up an advertiser’s costs—carefully consider the lack of autonomy before diving into Snapchat advertising.

Snapchat ads come in many forms and at different price points. Here is a breakdown of their most recent offerings:

Snap Ads

Snap Ads consist of a vertical, full-screen mobile video that lasts up to 10-seconds and appears in the context of other Snaps. With this type of ad format, there is the option to add more information by allowing Snapchatters to swipe up to see extended content like a long form video, article, app install or mobile website link. According to Snapchat, the swipe-up rate for Snap Ads is 5X higher than the average click-through rate for other comparable social platforms.

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Sponsored Geofilters

Geofilters, also known as geotags, are customization options that allow a user to indicate their location while using a device. On Snapchat, geofilters are digital stickers tied to a geographic location that allows a Snapchat user to overlay the creative on posted photos and videos posted.

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In the U.S., a single Sponsored Geofilter can reach 40 percent to 60 percent of daily Snapchatters, making it a popular ad choice with many brands. Advertisers use Sponsored Geofilters to engage and interact with Snapchat users. First, advertisers choose a targeted site or location to make the filter available, and when a Snapchatter ‘snaps’ within your desired location,' the user will be able to see and use your geofilter to explain where, when and why they took the snap. A Sponsored Geofilter can cover specific locations, major events or your audience’s favorite hangouts.

On-Demand Geofilters

These geofilters, which are designed for small business needs, are similar to the above sponsored geofilter except with one caveat; with this format, the business can create its own filter design. Once the design has been created, it is submitted to the Snapchat team for initial approval. After receiving the go ahead, an advertiser chooses the desired time frame and sets a geo-fence, which is a feature in a software program that uses the global positioning system (GPS) or radio frequency identification (RFID) to define geographical boundaries.

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“Whether it's for a house party or wedding, a coffee shop or campus-wide event, Geofilters make it easy for Snapchatters to send your message to friends.” -Snapchat ad description

Sponsored Lenses

Sponsored lenses offer an entirely new take on brand activation, offering users a chance to ‘play’ with brands through fun, animated masks. To activate lenses, Snapchatters just press and hold a finger on their face. Some lenses include prompts like “raise your eyebrows” to trigger an animation, adding a unique twist to the experience. It is also easy to send lenses to a friend or post one to your personal story. On average, Snapchatters play with a sponsored lens for 20 seconds.

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The cost of Snapchat ads

Snap Ads

Snap Ads is a new offering from Snapchat. The exact price of the ad format is still unknown, but various media entities report it to be much lower than expected, especially when compared with Snapchat’s other offerings. Estimates peg the entry cost at about $1,000. Remember, these are mobile video ads with the added option of embedding interactive elements to the ads.

Sponsored Geofilters

Nationwide Sponsored Geofilters are a new ad offering from Snapchat. These are filters available to Snapchat users across a large area (hence the word nationally). To give some perspective on the newness of the format, McDonald’s ran their first campaign with this ad option last year. It is currently unknown exactly how much this ad offering costs, but estimates place the number at roughly 1/5 of the cost of Sponsored Lenses.

On-Demand Geofilters

These are the cheapest of all of the ad offerings. The cost for local geofilters can be as little as $5. Snapchat recently partnered with Foursquare to make the geofilters more accurate and effective. The ROI can be quite high and represents excellent value for brands.

Sponsored Lenses

The cost for Sponsored Lenses varies depending on the day of the week, holiday, trends, etc. A general rule for Sponsored Lenses is this: $450,000 per day Sunday through Thursday, $500,000 for Fridays and Saturdays, and $700,000 plus for holidays or special events (like the Super Bowl).

Putting it all together

Snapchat represents a tremendous opportunity for the right brand, with several ad options designed to delight its users. Look for additional, new formats as the company seeks to innovate in its competition with Facebook and Instagram. If your business can manage to crack its advertising potential, you can expect significant returns. Hopefully, the information we have provided is a good start towards that successful campaign. We are rooting for you!

Lynn Pedotto

Lynn Pedotto

Lynn Pedotto is a writer who holds an MS from Medill. In addition to covering all things social, she’s a policy wonk who loves to write about government.