Snapchat Set to Open Its Doors to Small Business Advertisers

The past few months have brought a few ups and downs for Snapchat, the photo-sharing app most popular among younger adults and teens. In March, Snap Inc. celebrated a successful initial public offering when they arrived on the New York Stock Exchange. Unfortunately their first round of earnings proved a disappointment that sent their newly-listed stock plummeting. Since then, the company has made many efforts to get things back on track and boost their revenue. Their latest attempt at doing that is not only good news for Snap stockholders but also for small business owners looking to reach the app’s young-skewing and dedicated demographic.

As CNBC reports, Snap is unveiling Ad Manager, which will allow businesses to bid on ad inventory that’s priced as low as a few dollar. Futhermore this July the company will roll out a new tool advertisers can use to craft their spots, including trimming video, uploading logos, and more. Both of these moves take Snapchat further away from the “walled garden” it once was and make it far more accessible to small businesses with limited budgets. 

This move towards opening the gates to small-time ad buyers has been a long time coming for the app. First the company was notably slow to introduce ads, fearing they would alienate their audience. Once that bridge was crossed, it was rumored that the price of purchasing Snap ads started at a massive $700,000. However, even before their IPO, Snap began introducing self-serve ads platforms, APIs, and even introduced custom geofilters — an insanely popular feature within the app — that everyday consumers could design and purchase. 

The reason Snap would want to bring more small business ad buyers into the fold is obvious. Just look at the success Facebook has attained by becoming a go-to for small business social ads. From offering post boosts to selling fast-loading but media-rich Canvas ads to those of all budgets, Facebook’s popularity among business owners has been quite lucrative, with five million businesses regularly advertising on the social network. Clearly it would behoove Snapchat to snach up a piece of that market.

At the same time there are risks for the app in this move, mainly in the potential to turn off users by the increase in ads. As mentioned, Snap has been famously protective of their user experience and their somewhat stunted growth is surely already causing them concern. Enter a batch of lower-budget and potential lower-quality ads (coupled with the possibility that Snap will increase their ad inventory in various ways) and this could cause some users to bail. That said, the strength that Facebook continues to enjoy despite its prevalent advertisements may give Snapchat hope of finding the right balance.

Overall, Snapchats’s plans to allow for smaller-budget buyers to get in on the app’s ad action are a win for entrepreneurs. With the app billing itself as “the best way to advertise on mobile,” it’s encouraging that small businesses will soon be able to try out Snap’s apparent power for themselves. In turn, this open door policy could be just what Snap needs to get back on Wall Street’s good graces and prove its longterm viability once and for all.


Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded in 2015 to focus on personal finance and the emerging FinTech markets.

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