Once $500k, Snapchat’s AR ads are now cheap and luring in smaller advertisers

Snapchat helped pioneer augmented reality advertising, but the ad format, like many shiny experiences, was too expensive at a $500,000 minimum for most brands. Now, thanks to a $50 tier introduced earlier this year, agencies say more clients have been willing to try the experience.

The $50 mark refers to Snap’s “Snap Ads to AR” product where users see a 10-second ad between videos in Snapchat Discover and can swipe-up to experience the AR. It’s a bit different level of attention than paying for the spot right next to the popular puppy filter or floating hearts lens — still worth six figures for a national buy — but it’s made it possible for small businesses to afford AR. Advertisers also can pay as little as $10,000 for a spot in the main carousel if it’s targeted to a smaller audience.

“500K stills gets you a national slot on the carousel, but not everyone has that money. The difference is huge. It allows us to sell marketing plans and ideas to our clients who before might have ignored Snap because of price,” said Frank Shi, co-founder of agency Paper Triangles.

Of course, brands aren’t just paying for the ad slot. Agencies charge clients for the creation of the AR, including conception and development in Snap’s Lens Studio, available to any developer. Shi of Paper Triangles said his agency charges clients between $5,000 and $30,000 depending on the sophistication.

Once the lens (in Snapchat’s parlance) is created, more brands have been opting to show the experience by paying for impressions in Snap’s ad auction. Jenny Lang, svp, managing partner of integrated investment at UM Worldwide, said the majority of her clients are opting for auction-based campaigns rather than invest a significant amount of dollars in the carousel buy.

While more brands have been willing to test AR ads, the experience hasn’t always been well received. Based on a survey on UM Worldwide’s clients, Lang said, “some say lenses work well and some say they don’t. Some say they’ve done it, and all of their KPIs were way below benchmarks. They’re still trying to figure out where it’s appropriate to appear.”

Indeed, lenses still appear as a brand-safety concern. Speaking at Digiday’s Media Buying Summit in October, GroupM managing partner of brand safety in the Americas Joe Barone said some clients say they’re “low risk” until they realize that would get rid of any of the AR or static filters on Snapchat.

“Low-risk means you’ll have to drop all your Snapchat filters because we can’t control what people do with there,” Barone said. “But [clients] say, ‘Oh, we get a lot of engagement from them.’ [We say], ‘OK, then you have more risk tolerance.’”

If the lens doesn’t perform well on Snapchat, as in received a significant amount of engagement via Snap Ads, brands have taken advantage of their own channels to promote the experience through Snapcodes, the QR codes native to Snapchat. That could mean on billboards or on other online platforms like Facebook, Instagram and Twitter.

“They use their competition to promote it, which I find hilarious,” said one agency exec.

Some brands have built unique commerce opportunities with AR. For example, Levi’s recently created Snapcode where if a Snapchat user scanned it while in the Levi’s store in Walt Disney World’s Disney Springs, they could purchase an exclusive hat, all purchased through Snapchat. A Levi’s spokesperson said the lens had a “playtime” of 89 seconds, on average, which is “among the highest ever for a sponsored lens.” The Snapcode is still live but simply links to Levi’s website.

“The Snapcode for this experience was distinct to this Mickey Mouse moment and launching the Lens and product for a limited time,” the Levi’s spokesperson said.

An executive at a global agency said his clients have, for the most part, stopped investing a significant amount of ad dollars in Snapchat, opting for Instagram. But he added that AR experiences and opening lenses up to small and mid-sized businesses could really help Snap grow and succeed in the future.

“The filters are cool, for a younger audience and as a data ply to understand your customer. Snap could really lead the way in innovative ad platforms,” the executive said.


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