Snapchat keeps advancing with its monetization strategy by rolling out a 10-second video ad format on its Discovery platform. The advertisement model will cost 2 pennies per view for those willing to try Snapchat’s new initiative.
The program will be call Two Pennies and was first talk about in the latest 2015 NewFronts event. The Daily Mail, one of the few featured publishers on Discovery, and Elite Daily were making a presentation where Snapchat’s Nick Bell took the opportunity to announce the new advertisement format. Bell described Two Pennies as a very simple product, an ad costing 2 cents a view that runs up to 10 second and that reaches Snapchat’s very engaged audience.
Bell didn’t say what exactly a view was in they eyes of the company, that is, how much time of viewing would be required to call it a view. As with every products, the company wisely advances carefully to see the reaction and more information should be available in the coming days. Ads will be inserted among other publishers videos in the same fashion Facebook does with posts in its Newsfeed.
Two Pennies pricing is very far away from the previous advertisement model first offered in Discovery. Previously, advertisers had to pay 15 cents per ad that appeared on Discovery and publishers, on top of being in charge of selling ad placement had to give a percentage of their revenue to Snapchat.
In light of past reports that were pointing out Snapchat’s advertisement expensive pricing, observers today are saying the Two Pennies model is way more in touch with current market prices, as opposite as before were ads on Snapchat were considered to cost around twice market prices.
Snapchat is thus adding fuel to the mobile advertisement race occuring between different players involved in the mobile Internet industry such as Facebook, Google and Yahoo!. Without a doubt, Snapchat, only available through mobile apps, has an advantage in this war as it pretty much places itself among these big players with its business strategy that relies heavily on mobile usage.
With a respin of their revenue model, Snapchat demonstrates it’s getting serious about advertisement and wants to give real competition to Facebook and Google. Snapchat’s audience can be described as high-quality based on demographics, usage rate and engagement statistics but while we wouldn’t argue for a minute Snapchatters aren’t engaged, will they act the same with advertisements on the long run?
Here’s a video of the 2015 NewFronts recap by Interactive Advertising Bureau where they talk with Daily Mail CEP Jon Steinberg on partnering with Snapchat and Two Pennies ads.