Brief:
- Snapchat, the image-messaging application with 173 million users worldwide, is launching a program to incentivize early-stage companies to advertise on its platform, Business Insider reported. “Snap Accelerate” offers venture capital-backed startups, incubators and accelerator programs a range of benefits valued at as much as $100,000 to advertise on Snapchat.
- Snapchat will offer benefits like media coupons, creative services credits, free branded filters for their headquarters, early access to new ad products, tech support, self-service buying tools and API partners. The program’s three tiers are named "Kickstart," "Sprint" and "Scale," with corresponding benefits for each level.
- Separately, Snapchat this week accidently revealed a partnership with artist Jeff Koons as part of a buildup to a big announcement of the affiliation. Snapchat employees started tweeting a link to a webpage that showed only a countdown clock. Desktop users who fast-forwarded the time setting on their computers got an advance look at AR features that lets users put Koons’s artwork in pictures, which Snap later fixed.
Insight:
Snap, the parent company of Snapchat, was a startup not too long ago, making the company sensitive to the needs of boot-strappers who are trying to build a business with limited marketing resources. The “Snap Accelerate” program is one way to develop affiliations with entrepreneurial companies and introduce them to the value of advertising on a social platform that reaches millions of users around the globe. Startups in the earlier stage "Kickstart" get media coupons worth $10,000, while those in the "Scale" stage can get credit valued at up to $50,000 to help them test new campaigns, per Business Insider. In this move, the company aims to convert startups into long-term clients that will continue to spend their marketing dollars on the platform as they grow into bigger, more established and lucrative companies.
Snapchat this year has made a broader push to gain a wider base of advertisers with self-service tools that let individuals and small businesses run a geofilter campaign for small amounts of money. Snapchat Ad Manager lets mobile marketers target specific audiences with ad formats that include video. In July, Snap started accepting credit card payments for ad placements, enabling small businesses a quick and easy way to start a mobile ad campaign. Facebook, Google, Twitter and Pinterest have similar systems that advertisers can access through a browser.
Snap struggled to grow its audience this year, reporting that Snapchat only added 7 million new users in Q2 2017 to bring the total to 173 million, missing Wall Street estimates of 175.2 million, Fortune magazine reported. That slower growth led researcher eMarketer this month to cut its 2017 revenue estimate for Snap by 14% to $774.1 million. Snap has faced heated competition from Facebook's Instagram, which has copied several of Snapchat's features and grown its audience rapidly to 800 million, up 100 million since April.
