In early 2023, Snapchat reports a significant increase in advertising reach, reaching 634.8 million users worldwide over the past 3 months. This has led many advertisers to consider operating on this platform. I know you’re also contemplating whether Snapchat ad cost corresponds to the effectiveness it brings or not?
In this article, I will help you understand the minimum costs you will have to incur to advertise on this platform and what results you can expect to receive.
Table of Contents
Top 7 Factors That May Influence Your Snapchat Ad Rates
The expense of Snapchat ads varies based on numerous factors, including the ad type, target audience, ad format, and most significantly, bidding.
#1 Goal-Based Billing
When starting your advertising campaign, one of the initial decisions to make is determining your goal, and Snapchat offers 16 options for you to select from:
- Maximize impressions
- Swipe up (indicating viewer engagement with your ad)
- App installation
- Two-second video view
- 15-second video view
- Share filter
- Open story
- Sign up
- Purchase
- Add to cart
- Page view
- App sign-up
- App add to cart
- App purchase
- App purchase (re-engagement)
- App open (re-engagement)
Convincing someone to make a purchase on your website is considerably more challenging than having them watch a 2-second clip of your video ad, which means the cost of your Snapchat ads will differ significantly depending on your objectives.
Although you still pay based on the number of impressions your ad garners, goal-based bidding enables you to refine your ad placements to attain a specific price per goal.
#2 Bidding Strategy
The expenses of your Snapchat advertising campaign will be influenced by the bidding approach you employ. Snapchat offers 3 primary bidding strategies, each tailored to achieve your objectives in distinct ways, altering the allocation of your budget accordingly.
Auto-Bidding
Auto-bidding allows the Snapchat algorithm to bid on your behalf, determining the cost of impressions.
Advertisers establish a daily budget, and the platform optimizes delivery to maximize goal attainment. This method aims to fully utilize your daily budget, leveraging every cent to generate as many actions as feasible.
Max Bid
Establishing a maximum bid imposes a ceiling on the amount you’re prepared to pay for impressions.
While auto-bidding grants the algorithm complete authority over the amount spent to deliver an impression, the maximum bid method empowers you to set a boundary on the bids.
It’s important to reiterate that setting your maximum bid too low can affect delivery and the scope of your campaign.
Target Cost
This approach enables you to specify an average Cost Per Action (CPA) for your advertisements, establishing a goal for the Snapchat algorithm to pursue.
While the platform cannot ensure conversion volumes, if you have a clear understanding of the amount you’re willing to pay for an action (such as an app installation or sale), this can be a prudent method for managing your bidding.
Nevertheless, setting your target CPA too low may limit budget delivery and scalability.
Regardless of your chosen option, it’s vital to regularly monitor your delivery and performance in alignment with your Goal-Based Bidding (GBB) strategy. Adjusting your bid over time may be necessary due to seasonal fluctuations and evolving auction dynamics.
- Lower your bid if you need to drive more efficiency, but be aware that this may result in not fully spending your budget.
- Increase your bid to allow your ad set to enter and win more auctions.
#3 Targeting
Snapchat offers a range of targeting options including location, age, gender, and interests. The more precise your ad targeting, the higher the cost may be.
For instance, if you aim to target a specific age demographic, you might incur a higher expense compared to targeting a broader audience.
#4 Advertising metrics
When assessing the return on investment of your Snapchat ads, here are some key metrics to focus on:
- Spend: The total amount expended on the campaign thus far.
- Impressions: The frequency with which your ad was displayed.
- eCPM: The average cost per thousand impressions. CPM rates vary between $3 and $8.
- Completions: The number of ads watched to at least 97% completion.
- Average Screen Time: The average duration viewers spend watching your ads.
- eCPV: The average cost per video view (lasting two seconds or more).
- Swipe Ups: The number of instances where viewers swiped up to view your attachment.
- Swipe Rate: The average frequency of viewers swiping up to view your attachment.
- eCPSU: The average cost per swipe up.
#5 Ad quality
Just like other social media platforms, Snapchat generates its revenue primarily from advertising, amounting to $2.5 billion in 2020. However, this doesn’t mean that advertisers are its sole priority. Snapchat also prioritizes providing a positive user experience, which is why the quality of ads is crucial.
If Snapchatters find your ad compelling and engage with it extensively, Snapchat is inclined to prioritize showing that ad over a low-quality one.
Snapchat outlines the objectives of its auctions as follows:
- Serving the right ad to the right user
- Determining the appropriate charge for the winning ad
The order of these goals underscores the significance of ad quality. According to Snapchat:
We want to drive positive advertiser value while also ensuring consumers continue to have positive experiences on the platform.
To achieve this, auction winners are not solely selected based on the advertisers monetary bid, but rather, through the inclusion of a quality and relevance component.
#6 Ad Types
Snapchat provides 7 distinct ad types, various ad types come with different prices, meaning your choice of ad will impact the cost. Typically, video ads tend to be pricier compared to image ads.
Snapchat also provides advertisers with the alternative to purchase ads directly, bypassing the need for the ad manager. In this scenario, Snapchat procures the media on behalf of the advertiser and applies a fixed rate for CPM (Cost Per Mille, or cost per thousand impressions). However, the rate varies depending on the specific ad formats chosen.
According to Snapchat’s direct pricing, the expenses for Snapchat ads exhibit significant fluctuations depending on the type of ad and the day of advertisement:
- Single image or video ads commence at $3,000 per month.
- Sponsored lenses demonstrate considerable variability depending on the advertising day:
- $450,000 per day from Sunday to Thursday
- $500,000 per day on Fridays and Saturdays
- $700,000 per day during holidays and special events
While not everyone will be advertising at such a large scale, this information offers insights into how different ad types impact the cost of your Snapchat ads.
#7 Competition
In industries with high competition, the cost of advertising may increase as Snapchat may raise prices for ads in competitive sectors to maximize revenue.
Understanding these dynamics empowers businesses to make informed decisions regarding their Snapchat ad costs and optimize their advertising budget effectively.
By dedicating time to research and evaluate these factors, businesses can ensure that their Snapchat Ads are both cost-effective and effectively reach their intended audience.
How Much Does a Snapchat Ad Cost?
The average CPM on Snapchat stands at approximately $3.03, which is significantly lower than competing platforms such as Facebook ($5.27) and Instagram ($4.31), making it an excellent choice for those with limited budgets.
Moreover, starting with Snapchat ads doesn’t require a substantial investment. The minimum spend is only $5.15 per day, allowing you to initiate campaigns with a modest budget and gradually scale up over time.
Sponsored lenses, which provide users with interactive 3D experiences typically in the form of augmented reality filters, are available in package prices ranging from $450,000 to $700,000, depending on the desired advertising days.
In contrast, Snap Ads are conventional 10-second video advertisements displayed between stories, with a typical cost of around $50,000 per day.
Is Snapchat Ads worth it?
Introduced in 2011, Snapchat ranks among the top 10 most utilized social platforms globally, with a significant portion of its user base exclusive to the app and not active on any other social media platforms. Therefore, Snapchat Ads offer you the chance to connect with untapped audiences, some of whom may exhibit a higher likelihood to convert than average.
In the beginning of 2023, Snapchat announces a remarkable surge in their advertising reach over the preceding three months, peaking at 634.8 million users worldwide. This means advertisers now have the potential to reach 78 million more viewers on Snapchat compared to the same period last year.
Snapchat is preferred by individuals who enjoy sharing their favorite purchases and meaningful shopping experiences.
- Snapchatters possess a global spending power of $4.4 trillion.
- The platform boasts 347 million active users.
- In 2020, Snapchat recorded 300 million app installations, securing its position as the seventh most popular app.
What might also surprise you is that during the second quarter of 2022, Snapchat held the title of the social media app with the highest daily open rate, according to Statista. Approximately 34% of all active Snapchat users in the US engaged with the mobile app on a daily basis, surpassing figures for both Facebook (31%) and TikTok (23%).
Moreover, the Snapchat Generation are more willing to invest their money in discretionary purchases compared to individuals who do not use Snapchat.
Brands have the chance to engage with the Snapchat Generation by sharing compelling stories about their founders and origins. Given the Generation’s entrepreneurial spirit, they are eager to learn about these narratives. Brands that foster this mutual relationship may earn loyalty in return.
How to Lower the Cost of Snapchat Ads?
To reduce your Snapchat advertising costs, consider the following strategies:
Implement Goal-Based Bidding
Snapchat’s auction dynamics function on Goal-Based Bidding (GBB). Instead of predefined rates, advertisers bid on specific objectives such as Impressions, Swipe Ups, or Pixel Purchases. With Snapchat’s advanced AI technology, this method has proven to be the most efficient for achieving campaign goals. Once you’ve selected your objective, choose your bidding strategy (which we’ll cover shortly), and let Snapchat handle the rest.
Target a wide audience
My next suggestion for enhancing your ad sets is to aim for a broad audience. While you may initially consider targeting a smaller, more engaged group, expanding the reach of individual ad sets allows Snapchat’s delivery system more flexibility to optimize based on your bid objective. It’s crucial to bear in mind that even with broad targeting, Snapchat’s Goal-Based Bidding always strives to display your ads to Snapchatters most likely to take the desired action.
Ensuring your audience is broad enough is essential to meeting your desired budget. If you’re already meeting your budget, you can utilize Delivery Insights reporting to assess which audiences perform best (we’ll delve into this further below). From there, you can refine your audience targeting.
Modify or turn off frequency caps
Frequency capping is an option when bidding on Impressions. If you observe fluctuations in your expenditure throughout a campaign, it’s possible that the frequency cap is limiting full spending.
In such cases, you have the choice to either remove the frequency cap entirely or reduce its strictness to allow for more ad expenditure.
How much should you spend on Snapchat ads?
How much you allocate to Snapchat ads relies on your Snapchat marketing strategy. Factors such as your industry, business size, marketing objectives, budget, and target audience need to be taken into account.
Snapchat mandates a minimum daily spend of $5, ensuring you invest at least this amount. However, you have the flexibility to set daily and lifetime budgets, as well as spending caps for each campaign, giving you considerable control over your Snapchat Ads expenditure.
As mentioned earlier, the average cost of Snapchat ads is roughly $2.95 per thousand impressions. Nevertheless, this cost can fluctuate significantly based on factors like the number of advertisers, industry dynamics, and other variables discussed previously.
On average, businesses allocate slightly over 10% of their total budget to marketing, providing a rough guideline for what you might consider investing in your Snapchat ads. However, the percentage of your marketing budget allocated to Snapchat ultimately hinges on the success of your ads.
A Snapchat Ad Cost Case Study from Mega Digital
Below, I’ll detail the costs associated with a Snapchat campaign sample for an eCommerce client our agency handled.
Customer Background
Our client is an eCommerce business specializing in fashion and accessories.
They target a young and tech-savvy audience, aiming to increase brand awareness and drive sales through digital advertising. The client had previously experimented with various social media platforms but wanted to explore Snapchat as a new channel.
Challenges
- Limited brand exposure: The client’s brand was relatively unknown on Snapchat, and they needed to establish a presence.
- Optimizing ad performance: They wanted to maximize their return on ad spend (ROAS) while maintaining a competitive cost per acquisition (CPA).
- Measuring success: The client needed clear metrics to evaluate the effectiveness of their Snapchat ad campaigns.
Strategy
We collaborated closely with the client to optimize their product data feed for Snapchat. This involved refining product titles, descriptions, and images to enhance visibility and relevance.
- Creative Ad Formats: We designed engaging and visually appealing ads using Snapchat’s various formats, including product catalog ads and story ads.
- Audience Targeting: Leveraging Snapchat’s robust targeting options, we focused on reaching users who matched the client’s ideal customer profile.
- Continuous Monitoring and Iteration: We closely monitored campaign performance, adjusting bids, creatives, and targeting as needed to improve results.
Results
- 87% Revenue Increase: Our data feed optimization and targeted ad strategy led to an impressive 87% increase in revenue compared to previous campaigns.
- 10x ROAS: The client achieved a 10x return on ad spend, exceeding their initial expectations.
- Positive Client Feedback: The client expressed satisfaction with the results and plans to continue investing in Snapchat advertising.
Wrap up
So, how much are Snapchat ads? Ultimately, you have full control over it; you decide how much you want to invest in Snapchat ads.
Regarding advertising expenses on Snapchat, here are the key points to consider:
- Snap Ads typically range from $3 to $10 per thousand impressions.
- Lens Ads require an investment starting at $450,000, potentially with additional costs based on generated revenue.
- Live Story Ads entail a minimum expenditure of $50,000 or more.
- Snap Forecast Ads range between $100,000 and $400,000.
Snapchat offers a great deal of flexibility, allowing you to set precise budget limits and define your business’s success metrics. The platform then optimizes your campaigns to ensure your ads reach the audience most likely to take the desired action, maximizing the effectiveness of your budget.
If you’re seeking assistance in managing your social media channels and integrating them into your overall digital marketing strategy, feel free to book a consultation with my team. I’ll demonstrate how we can help you achieve success.
