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$750,000: What Snapchat Disappearing Ads Will Cost Brands per Day

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Snapchat has started allowing brands to post advertisements on its previously ad-free platform in an effort to monetize the popular disappearing messages app. Just how much are brands being asked to pay in exchange for a disappearing ad? $750,000, according to a report by AdWeek.

Citing multiple industry sources, Adweek says Snapchat believes it is asking for a reasonable price given the fact that its platform is largely populated by teens, a market that is notoriously difficult to reach. More than 100 million users, largely composed of teenagers, use Snapchat every month.

"They [Snapchat] have minimums, and they are very firm on them," said an agency executive who has spoken with Snapchat. "From a monetization perspective, they are looking for fewer, bigger, better."

Snapchat's advertising strategy is akin to Apple's iAd launched five years ago, when the iPhone maker went after only the top brands who are willing to pay $1 million to advertise on its platform. However, Apple had since adjusted its price expectations to as low as $50, and the Snapchat platform is markedly different from Apple.

For one thing, Snapchat's advertisements, which are posted on the My Story section, are fleeting. Users can only view them during a 24-hour period before the ads vanish into thin air. That alone is reason enough for brands to balk at the $750,000 price.

"It's very hard for marketers to get their hands around advertising that is so ephemeral," one source said.

The ephemeral messaging startup is asking a whole lot more than Monday Night Football on ESPN, which is considered one of the most expensive places to advertise on TV. Monday Night Football, which reached a viewership of 9.6 million households in 2013, asks for $408,000 for a 30-second spot.

By comparison, YouTube charges half a million for a masthead for a day, while Instagram, which runs Sponsored Posts akin to Snapchat's video advertisements, has prices ranging from $350,000 to $1 million for a month-long contract.

Twitter has a pay-per-click advertising model, charging $2 for every click an ad gets, but Promoted Trends are said to go for as much as $200,000. Facebook is a lot more flexible, with ad rates starting as low as $1 depending on the advertiser's budget, audience and duration of campaign.

For the price it is asking, Snapchat does not even provide a satisfactory analytics engine to provide advertisers insight about their 24-hour ads, executives say. One executive says Snapchat cannot even tell the percentage of men and women who view the ads or provide a breakdown of viewers by age.

However, as its recent partnership with with Millward Brown Digital shows, Snapchat is at least aware of its need to provide better analytics that allow advertisers to measure the success of their ads.

"I'm a big fan of Snapchat, but they are going to market with rates that are significantly higher than what's competitive out there," said one top executive at a major brand. "It is difficult to go forward with a deal with Snapchat at the prices they are quoting."

So far, a few brands have had successes with advertising on Snapchat. Universal Pictures, which was the first brand to partner with Snapchat, saw much success with its ad for the film Ouija, so it decided to push another ad for Dumb and Dumber To. Other brands, including McDonald's, Samsung and Electronic Arts, have also advertised on Snapchat.

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