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Snapchat Is Serious About Ads, Now Advertisers Want the Data

Snapchat can rely on its audience to bring in advertisers -- for now.

Asa Mathat for Re/code

There is a lot for advertisers to like about Snapchat. It’s mobile. It’s video-heavy. And its audience, more than 100 million people per day, is predominantly young people and millennials whom advertisers love.

But as Snapchat starts to expand its ad efforts — and it certainly seems to be gearing up for the holidays — there’s still a key missing piece: Significant data on how well these ads are actually performing.

Snapchat is a young company at the beginning of making money. No one expects the kind of dashboards or ad performance tools that public companies like Facebook and Twitter provide. But as Snapchat evolves, and its revenue business grows, that kind of data is going to be key to retaining advertisers throwing money at the business.

Snapchat’s new sponsored lenses ad

Ben Winkler, chief digital officer at Omnicom’s OMD media group, says there’s “no question” Snapchat struggles with this. “Of course, the challenge here is even as they’ve improved with their reporting and performance, the goal posts are moving,” he added. “Every one of their competitors are [also improving].”

That issue hasn’t really hampered the company, at least not yet. It launched both Sponsored Discover Channels and Sponsored Lenses last week, and the Lenses alone are going for more than half a million dollars per day. But you can probably expect these ad prices to mellow out over time, just like Snapchat’s Discover ads, which started off very spendy before dropping dramatically in price a few months later.

“Brand marketers want to be the first to do something, and they’re willing to pay a premium to do that,” explained Jeremy Sigel, director of mobile for media agency Essence. “But once a number of marketers start to do it, it does lose its shine a little bit.”

That’s not to say Snapchat should be worried. Sigel, for instance, says he’s seeing a lot of interest from advertisers for Snapchat’s ads even if they don’t provide a lot of feedback. Some of that interest probably stems from the fact that Snapchat has some pretty interesting ad formats, like sponsored lenses, but also some familiar ones, like video ads alongside its Discover section.

“I think at this point, most advertisers continue to be more interested in Discover because it’s something that feels a little bit more familiar from a pricing perspective,” said Sigel. “The videos may look different, but they’re still videos.”

Looking into the future, though, Winkler believes that the most successful advertisers on Snapchat won’t just embrace the service for its young user base. It’ll embrace it for the ephemerality of the ad content as well.

“Young people are always catnip to advertisers,” he said. “But the ephemerality of Snapchat continues to be the defining feature of it, not the age of the audience. And advertisers who recognize that ephemerality is more important than youth are going to succeed.”

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