Snapchat has been one of the bigger success stories in social media, drawing a number of big brand names and garnering eight billion daily video views from users. So it shouldn’t be a surprise that the company is revising its video ad model at a slightly higher rate.
DigiDay recently reported that the company has doubled its price for its interactive video system, charging a minimum of four cents a view for 3Vi (vertical video views and interactive) ads. With these ads, users can swipe up to watch a longer video, install a separate app onto their phone, or visit a separate site. Meanwhile, non-interactive videos will continue to be two cents a view.
What does this add up to? Advertisers are now paying an upward of $40 CPM for interactive ads, even if users don’t follow them to view longer videos. This is twice what the usual $20 CPM comes out to.
“That was a big hike for the 3Vi ads, where you swipe up to interact, that increase for us was too high relative to the engagement rates we see,” said one Snapchat advertiser, speaking anonymously.
However, it’s worth noting that the system is currently in testing phase and only has a few advertisers, so the price could change. However, given the app’s robust daily view count, it’s just as likely to stick around.
This is the latest change to the company’s advertising model, as it also launched an ad system with a price tag that ranges between $500,000 and $700,000, and it can even be higher in some cases.
The only question now is how effective these new advertising prices can be, especially with Facebook growing its own video services. “This is going to be tricky for Snapchat in that they are up against very robust video products like Facebook, Twitter and Instagram, and it is likely hoping that post-campaign attitudinal studies will prove out the validity of the pricing model,” said Jill Sherman, senior vice president of social strategy for DigitasLBi. “Snapchat recognizes it is in a power position and that this is a shiny object that brands want to try.”