Snapchat charging huge numbers for its Discover ads

13 Mar 2015

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Perhaps shedding some light on why Alibaba values Snapchat at US$15bn, it appears the mobile messaging app is bagging US$100 per thousand views of adverts – twice the average.

Yesterday it emerged that Chinese e-commerce giant Alibaba was planning to invest US$200m in the company, adding to a portfolio already including the likes of Tango, ShopRunner and Lyft.

And now some digging by Re/Code’s Kurt Wagner has found that Snapchat’s new Discover platform is drawing in significant revenues, markedly more than others, and so big that they will inevitably attract investor attention

“Snapchat publishers set their own rates and provide a guaranteed view count to ad buyers based on traffic patterns they’ve established in the last few weeks,” says Wagner.

“Industry sources say that on average, publishers are getting around 10 cents a view for their ads, which are seen anywhere from 500,000 times a day to a million times a day. That means publishers are able to command US$50,000 to US$100,000 a day for their stuff.”

This is all possible thanks to Discover, launched in January as an extra layer of Snapchat’s offering. Through partnerships with the likes of Sky, ESPN, CNN, Comedy Central, The Daily Mail, Vice and National Geographic, these publishers post editions on Snapchat, selling advertising to go with it.

If they sell advertising themselves they get 70pc of the cut, if Snapchat sells adverts, they are split 50/50.

Interestingly, publishers setting their own rates is something new, given reports earlier this year that Snapchat sought US$750,000 a day from advertisers.

Either way, it’s big money. Or at least, the potential is there for big money. Given that Snapchat is only a few years old, and Discover a few weeks, it’s hard to predict just how this will all go.

Snapchat image via Shutterstock

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Gordon Hunt is a journalist at Siliconrepublic.com

editorial@siliconrepublic.com