Snapchat Lowers AR Ad Prices to Attract Small Advertisers

There was a time Snapchat AR ads went for at least $500 000. Then, the company had just participated in pioneering the ad format, and so the high prices were expected. Last year, the company introduced a new $50 tier that allows a broader range of brands to participate.

The tier has been dubbed ‘Snap Ads to AR’ and allows the user to see an ad for ten seconds between videos. The user has to be on Snapchat Discover. They can choose to experience the AR ad by swiping up.

The ad format is different in the way that it is set up. A brand will not, for example, be buying a spot next to a popular filter, but even then, the format is still valued in six figures to get a national audience. Advertisers also have a chance to buy ad space for a minimum of $10 000 to be placed in the main carousel to target a small audience.

With 500K, one can still get a slot on the national carousel. But Snap realizes that not everyone can afford those prices and so the new tier makes a major difference. They can engage brands that would otherwise ignore the platform because of the ad prices,’ said the co-founder of Paper Triangles, Frank Shi.

Of course, the brand will not just be paying for an advertising slot. On Snap, agencies charge for creating the AR ad, a package that covers everything from conceiving to developing the ads in the platform’s Lens Studio. Shi said that he was able to get the service for his agency at a fee ranging from $5000 to $30000, a range that is dependent on the sophistication of the ad.

After creating the lens, brands can display the experience through bought impressions in the ad auction. According to Jenny Lang, many clients opt to run their campaigns based on the auctions instead of investing a considerable amount of money in a carousel buy. Lang is a managing partner at UM Worldwide.

At the moment, there may be more brands willing to test the ad format, but this has not always been the case. A survey conducted based on UM Worldwide’s clients showed that there are lenses that do not work well.

Some clients report the lenses to work fine, but some have a different story. For them, the KPIs were way lower than they expected. They are still thinking about the proper placement for their AR ads,’ said Lang.

Indeed, it appears that lenses are a threat to brand safety. Joe Barone, addressing the attendants at Digiday’s Media Buying Summit last year said that for some clients, the ad format is ‘low-risk’ as long as they do not have to remove the AR or other static filters on the platform. Barone is a managing partner at GroupM and oversees brand safety in America.

By ‘low-risk,’ I mean that the clients need to remove the filters because there is no control over what people will do with them,’ said Barone. ‘But even if some think they do it for the engagement they get, we think they have a higher tolerance for risk.’

If the lens is not as successful in the platform, that is, if it does not yield significant engagement through Snap Ads, brands have been registered to use their channels to promote the experiences. They use QR codes and Snapcodes that are native to the platform. These tools are shareable through billboards and on other social media platforms like Twitter, Facebook, and Instagram.

Brands take advantage of their competition to promote their ads, which I find fascinating,’ reported one agency executive.

Some brands have developed for themselves unique opportunities to make money using AR. For instances, Levi’s recently made a Snapcode that the user could scan while in the store. With the scan, they could buy an exclusive product through the platform.

A spokesperson of the store revealed that the lens played for an average of 89 seconds which for them is ‘one of the highest with a sponsored lens.’ The Snapcode is still live now, but it links to the company’s website.

The Snapcode we used was different. It featured a Mickey Mouse moment, and it was only run for the product, for a short time’ said the spokesperson.

A global agency executive said that most of the times his clients do not invest large amounts of money in Snapchat. They prefer Instagram. But he added that AR experiences alongside the lenses are opening up the market to mid-sized and small businesses. It could help Snap to succeed in the days to come.

The filters attract a young audience and work well as data plies for understanding the customer. Snap could set the pace for innovativeness in ad formats’ said the executive.

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