The war to get more users is not over. Snap that has been struggling with its growth, especially after Facebook and Instagram have blatantly copied its features.
And here, it has another strategy. After trying to lure back users from competitors, Snapchat is also going after their advertisers.
Snapchat has rolled out a program that offers free credits to those that have recently bought vertical video ads from Facebook, Instagram, Pinterest and other digital ad sellers like AdColony, ChartBoost and Vungle, ad networks and even digital billboards, the company spokesperson said.
But to be eligible, they must not have run any ads on Snapchat previously, and must provide a proof that they have ran a vertical video ad campaign elsewhere.
To do this, Snapchat is directing advertisers to an online application where they can upload a proof of purchase.
Called 'Accelerate for Social', advertisers are asked to provide their names, work email addresses, Snapchat business account IDs (with a link for those who haven't had one), PDFs of documents such as invoices to prove that they have previously run digital ads during the past three months and the vertically oriented creative that they would like to run on Snapchat.
If eligible, it will then offer them credits in the range of "several hundred dollars," according to a source.
As a smaller being if compared to Facebook and Instagram, Snapchat has not been shy about its needs to increase the number of users and advertisers. One problem for Snapchat is that most of its vertical video ads are ran through a process called programmatic ad buying. What this means, Snapchat uses an automated software to auction off ad spots to the highest bidders. Here, not many of its auctions have much competition in the platform, due to the small number of advertisers bidding for ads.
Since few advertisers bid on the system, the leaner the price.
And here, Snapchat wants to increase that pool of advertisers, so in theory, would result in higher ad prices and more revenue for the company.
Previously, Snapchat also has offered ad credits to attract advertisers. Called Snap Accelerate, it gives special deals to VC-backed startups that want to advertise on Snapchat. If also offered ad credits as well as discounts to advertisers shortly after its IPO.
Advertisers can apply for the free credits through a form on Snapchat’s site. To be eligible, an advertiser must not have run ads on Snapchat previously and must provide proof that it ran a vertical video ad campaign elsewhere within the past three months.
If approved, the advertiser will receive credits to use on Snapchat’s vertical video Snap Ads that will be valued in the range of several hundred dollars, according to the Snap spokesperson who declined to provide exact amounts.
There are no minimum spending requirements or other conditions attached to how advertisers spend their ad credits, other than the fact that they can only be used to purchase Snap Ads, the spokesperson said.
On the one hand Snap is making an offensive maneuver. By offering an effectively free trial to its rivals’ advertisers, it is looking to persuade those brands that their money may be better spent on its inventory. That argument could be buoyed by Facebook’s ever-increasing ad prices, though Snap would need to prove that it can provide advertisers’ a similar, if not better, return on their investments than Facebook. To that end, Snap has done a lot of work in the past year to be able to tie its ads to actual business results, including tracing its ads to store visits, comparing its ads’ impact on sales against ads on other platforms and rolling out a conversion tracking tool.
On the other hand, Snap is also playing defense. Its flagship app was the first to popularize vertical as the mobile-native video format. But the format has since been adopted by Facebook, Instagram, Pinterest, YouTube and even publishers’ sites and apps. That relative prevalence has diluted some of Snap’s unique sales proposition and, more importantly, made it so that advertisers investing in vertical video in order to appeal to mobile viewers are not limited to running it on Snapchat and can place it elsewhere where they may receive more eyeballs. Just as Instagram Stories has made it so that people interested in the Stories format don’t need to open Snapchat to use it, the same is true for brands interested in buying vertical video ads. But if a brand has already bought a vertical video ad elsewhere, has been hesitant to try its hand at Snapchat but now can at zero cost, what’s the risk?
For Snap the risk would be giving away its inventory for free instead of finding a buyer for it. But Snapchat remains such a shiny new toy for many advertisers, that it’s likely the app has more unfilled inventory than it knows what to do with, so it’s placing a short-term bet in hopes of a long-term boost to its business.
