Snapchat is one of the most popular and most used communication apps when it comes to sharing photo and video content. It’s also considered its own social media platform with 300 Million + daily active users. With every app like this, however, one of the biggest challenges is how to make money. What kind of business model and strategy is viable? Snapchat’s business model is one different from any other social media platform. This has allowed the app to grow and thrive at an exponential rate.
The One of a Kind Business Model
If Snapchat is a social media app how do they generate revenue? Snapchats business model is unique because it’s entirely based on analytics. While other social media platforms will sell user information and data to advertising companies, Snapchat uses their user data to accurately target users with specific advertisements. Basically, Snapchat handles all the advertising users see on the platform.
Snapchat’s main source of revenue is of course advertising. Snapchat was able to bring in roughly $1 billion in revenue in 2017. The cool thing about Snapchats ads, however, is how user-friendly and camouflaged as content they are. These advertisements are woven into Snapchat’s features and many users engage these ads like they would with other content and features they are subscribed to.
Here are a few features Snapchat uses to advertise:
- Sponsored Geofilters – Companies can create and run their own filters for photos in specific locations.
- Sponsored Lenses – utilizing Snapchat’s augmented reality technology, companies can create fun and engaging animations that can showcase a product of theirs.
- Sponsored Stories – Companies can promote their own stories on the platform.
- Partnership with Shazaam – Users can instantly find the name of any song they are listening to through the Snapchat app.
- The Discover Page – Companies can create and post content to Snapchat’s Discover page in fun and engaging ways.
Snapchats business model is one of kind and has been incredibly successful. Snapchat continues to grow more and more each year and we can learn from its unique way of approaching advertising.