Snapchat is becoming an outlet for video ad budgets

Snapchat is becoming a bigger contender for video ad budgets in the U.K.

More advertisers are using money they would have spent on Facebook and Instagram to buy ads on Snapchat, according to six agency buyers interviewed for this article. It’s a contrast to where the mobile messaging app was last September when it wasn’t even on the media plans for some paid-social campaigns. Since the turn of the year, however, Snapchat has found its way on to more of those media plans, and in some cases can account for 20% of paid social budgets.

“When we’ve had a relevant client that’s wanted to target Snapchat’s audience with video ads, there have been times this year when they’ve spent up to 35% of their paid-social budget on the app,” said Oliver Booker, head of paid social at Reprise Digital.

At other times this year, Snapchat’s share of those budgets has been slightly lower.

“Snapchat can account for around 10% of a paid-social budget now,” said Richard Burgess, senior account manager at We Are Social. “It’s not a huge proportion of money because paid-social budgets never are. But it does show how Snapchat is starting to encroach on Facebook, Instagram and YouTube.”

Most media budgets tend to be split across channels by objectives so the budget for Snapchat would come from Facebook or YouTube since those are the two with the best video options. And with YouTube still being queried on plans by some advertisers due to brand safety concerns, the ephemeral mobile messaging app is starting to look like a good alternative route to the same audiences.

It’s not always been easy to see how ads on Snapchat could be an alternative to those of its largest, most established rivals. Indeed, ads on the mobile messaging app tend to be easily skippable, contributing to low viewability rates. The launch of unskippable ads called Snap Commercials last year, however, has pulled Snapchat’s ad pitch more in line with its competitors. Now, advertisers can pay to get a completed view during Snapchat’s TV-like shows in much the same way they would do if they bought pre-roll ads on Facebook or YouTube. For now at least, there’s also less competition for Snap Commercials in both U.K. and U.S. markets, which means the average cost per completion rate can be as low as one cent, said a senior buyer at a network agency on condition of anonymity.

“Since the launch of commercials, we’ve seen 70% of the impressions served have a completed view,” said the senior buyer. “Snap Commercials could be game-changing for our clients on Snapchat because the skip rates are too high elsewhere in the platform, even when it comes to some of the more popular formats like Stores.”

Keen to sell more unskippable ads, Snapchat has added a direct response layer to what were just six-second ads. At Advertising Week New York yesterday (Sept. 24), the platform revealed that advertisers can now add swipe actions to their commercial campaigns — just like users can do with standard ads on the app. Actions can range from letting users swipe up to access a web page, long-form video or camera attachment.

Plans are already underway to grow the inventory for Snap Commercials, with Snapchat working on content deals to create the shows the ads appear in. Recent deals have covered Saudi Arabia, India and Norway, said David Shaw, head of international product marketing at Snapchat

“A big reason we’re growing budgets is down to the performance advertisers are seeing off the back of low cost per views and efficient cost per thousand for impressions. It’s allowed us to play for budgets where we may not have been able to do in the past,” said Shaw. “Social advertising has been a big pool we’ve pulled ad revenue from, but we’re also starting to see online video buyers become more willing to test Snapchat outside of the paid social space.”

While the popularity of unskippable ads has provided an immediate boost to Snapchat’s commercial goals, there’s still interest in skippable ads. So much so that Snapchat has made them longer. The maximum duration of Snap Ads has been extended from 10 seconds to three minutes, according to the company’s announcement at Advertising Week. Like Snap Commercials did last year, the extended length of Snap Ads makes the appearance of ads closer to how they look on other platforms.

Selling longer ads seems somewhat counterintuitive for a social platform that built its ad business on bite-size, vertical video. Creating suitable ad formats wasn’t cheap, especially when it would involve having to pay for a different edit to what is used on other platforms. Even the prospect of buying cheaper ads on Snapchat compared to elsewhere wasn’t enough to convince advertisers to commit more budget to the app. CPMs across Snapchat vary massively, but ad buyers have seen them as low as £1.50 ($2) in the U.K., compared to the £3.50 ($4) they would expect to pay on Facebook. Selling longer ads lowers the barrier to entry for advertisers.

“It makes sense for Snap to start offering longer video slots as it means their offering becomes more in line with their major competitors,” said James Mortimer, paid-social strategist at iCrossing U.K. “Due to Snap’s unique nature creative typically requires more editing, which we believe is essential for every platform, introducing longer video ads helps erode that need and enables advertisers to repurpose video creative from elsewhere.”

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