Snapchat demands $750000 for disappearing ads: Is it too pricey for social ads?

The most recent buzz in the marketing and advertising circuit has been about the Adweek report that revealed that Snapchat is asking brands to pay minimum of **$750,000 per day** for its disappearing ads. Snapchat is said to be quite stubborn with the prices. While many brands are mocking the price, Snapchat believes it is completely fair because it caters to the most difficult audiences – teens. Snapchat is quoting even higher than what YouTube asks for a day, and somewhat in line with mainstream TV ad rates. Is that too much for social ads? Is social advertising trying to get at par with TV rates? Is this the start of paid social? Several such questions have started surfacing. Facebook is believed to have lost its young audiences to Snapchat, however, it is still the most popular social network. Why would one advertise on Snapchat instead of  Facebook? “With Facebook and Twitter, you can passively consume content. On Snapchat you have to physically hold down a button to get content. For advertisers on Snapchat, this ensures that someone wants to see the ad and that they are looking at the screen when the ad is served,“explains Techcrunch citing Mat Yurrow of the New York Times. Moreover, it should be noted that Snapchat is used by approximately one-third of millennials (18-34 year olds), according to a ComScore report. Now, that may be a relatively broad demographic, but there are many advertisers that only care about this group. Some feel that the price is too hefty, considering the ads will disappear eventually, but Techcrunch points out, “Even if the ad is ephemeral, it can still influence purchase decisions at a later date, and “immediacy” is really tied into the whole engagement piece. The mobile location data piece is just not there yet, so it shouldn’t influence an advertiser’s decision to spend yet.” Another point of discussion is how Snapchat lacks sophistication and has limited reporting capabilities, like there is no age breakout. It can’t even tell brands how many men versus women saw an ad. This is where Facebook steals the brownie points. If one advertises on Facebook, they will know exactly how many people clicked on the link and even how many bought the product. “On top of the massive reach Facebook provides, it also offers social currency in the form of endorsements from friends (so and so also liked this post). Snapchat is one-to-one and can’t do anything like this — yet. With Facebook you get better analytics, more reach, better targeting, and endorsements from friends that also like the update. It’s a better bang for your buck, and you can reach the exact same audience that is using Snapchat,” the report adds. However, it further adds the ‘cool’ factor that people have been looking for these days. So, advertising on Snapchat means you are reaching people on a platform that is associated with cool by the younger strata. Facebook may have all the necessary systems in place, but it is believed to showcase all the data in the form of “uncool” text. The high rates that Snapchat is quoting are quite similar or even higher than some prime time TV advertising. Though there are 100 million active users, one cannot be sure how many are viewing the ad, rather the user has to choose to view the ad. “There’s no targeting in Snapchat, so while you might be reaching millennials, you don’t know which millennials are actually seeing the ad. Are they male or female? Are they 18 or are they in their 30s? Do they live in the city or the suburbs? We have no idea. At least with ESPN you have slightly more targeting (you know the viewers like football). The lack of detailed analytics might be the real Achilles heel, and limited targeting doesn’t make the price tag any easier to justify,” further adds the report. Advertising on Snapchat has a lot of potential, but an over-priced ad doesn’t seem to be the right way to go about it. At an experimental stage, it may not  be able to attract brands with such a high price and could even backfire.