Snapchat wants to lure small businesses to run ads on their platform

By:Vandita Jadeja 2017-08-28

With an aim to recut its way to revenue growth, Snapchat is offering discounts and incentives to help the brands recut their videos into a vertical format. These incentives appear to be targeted at small brands and businesses which have smaller media presence and smaller production budgets. Snapchat is offering to reimburse the recut cost to a greater of $1,500 or 1% of the overall budget where the amount spent is over $40,000. They aim to eliminate the friction between the horizontal ad assets and its vertical ad format.

Snapchat also offered to cut assets for an agency’s clients if the clients were unwilling to do a campaign because they did not have any vertical video. Snapchat is also ready to make ads for brands above a certain amount for free. It does this by tapping into its ad design team or through a third party vendor like itself. All a brand has to do is provide their media, whether it is a creative from a TV spot, a YouTube video or a raw clip.

Snapchat is not the only one offering such incentives. Incentive programs are a regular product and sales strategy for various platforms, with the idea being to get brands to try new formats and eventually get them to spend more. Instagram offers a similar platform and also helped an auto brand resize their video by absorbing the additional cost of editing for the brand. In the case of Snapchat, the incentives are aimed at boosting the ad revenue and the objective is to get brands that may be willing to spend more eventually. With an aim to eliminate any friction, the advertisers can try it out and feel more confident.

The incentives are targeted at small brands and small business. Snapchat has tried its best to appeal to smaller brands in the recent months and had introduced a self-serve ad buying platform which lets advertisers of all sizes develop a full screen video ad in less than two minutes. Once Snapchat gets new advertisers on board for advertising, it can point them in the direction of creative publisher tools and self-serve.

The incentive encourages broader adoption of the vertical video format. Snapchat has led the vertical video format and the new publisher tool makes it easier for the marketer to adopt it. But advertisers have not yet jumped at the format. This makes sense to get new advertisers over the stumbling block of vertical video although the issue of format still persists for certain advertisers.

Due to the fall in the revenue of second quarter, Snapchat announced this move which will help generate revenues for the coming quarters. The move is aimed at small business with small budgets and limited media for promotions. With the various incentives offered by Snapchat, it is hoping to have additional businesses on board who will be willing to spend and this will generate revenues for the company in the long run.

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