Snapchat is a mobile app that allows its users to instantly share short movies or pictures to the people that are following them. The app has over 100 million daily active users which makes the a advertising gold mine. According to a new report from the Financial Times, the app is on it’s way to generate $100 million in revenue this year. This is pretty incredible especially when you take into consideration the company only reported spending less then $1 million on marketing the application.
In an effort to generate more revenue Snapchat has introduced “Lenses”, these are different selfie filters to modify your snap. The different filters rotate daily and new one are randomly thrown in the mix everyday. According to Financial Times, Snapchat will start selling the ability for brands to create lenses to push their product or idea. These “Sponsored Lenses” are not cheap either with a price tag of $450,000 for a lens on a normal day or $750,000 on a “peak day” meaning a holiday.
Snapchat has a couple other avenues to make money through its Discovery product and Live Stories. In Discovery the user views feeds created by different brands from National Geographic to IGN (a video game news company) and Snapchat charges each brand per view. Almost the same thing happens with Live Stories, except ads are inserted into other users content and again Snapchat charges a small amount per view.
Adding up the numbers it makes sense how this product was able to generate these kinds of numbers so excuse me while I go develop the next big Social Media App.