Social networks start off by being funded by VC’s where the cash is used to pay salaries, pay for server use and for scaling because in the long run, the business has to start making money. Snapchat is in that predicament as it has been receiving VC funding for a while now and since it has gained quite the audience, it has to find out ways of making money.
Well according to Adweek, Snapchat is trying out another way of making money and it involves ad placement within Stories. If you are a regular user of Snapchat, you would know that recently, the company introduced auto advancing stories which allowed you to see all the snaps that have been posted by your friends in one sitting. Now Snapchat will use that to sneak in ads (Snap Ads) when you are watching the various snaps in the Stories page.
Snapchat’s Head of Monetization Product, Peter Sellis was quoted by the publication about their thinking process towards this move which some users might find annoying: “By doing this the right way, focused on creativity and doing it early , it allows us to be extraordinarily conservative,” he said. “Something that I think that often gets lost is that ad effectiveness can be inversely correlated with the number of ads that the viewers see. If you see 50 ads in a day, the probability of you remembering them is low.”
Snapchat recently passed Twitter in terms of daily active users and also revamped the Stories page which correlates with this move to start pushing ads as soon as possible. It was inevitable of course and we will have to see the reaction people will have to these ads and if they will generate significant revenue for the millenial friendly site.