With Snapchat Commercials, advertisers see a ‘cheap alternative’ to competitors

With the launch of Snap Originals — more formalized original programming within Snapchat — the app once known as a messaging app for teens is becoming more similar to mobile TV. And with the growth of content comes the rise of TV-like ad formats.

In May, Snap released Snapchat Commercials, an unskippable, six-second ad unit, to exclusively run in its premium content called Snapchat Shows. Sean Mills, Snap’s head of original content, said Snap expects to run two or three Commercials per episode of new programming. Unlike Snapchat’s other ad formats, Commercials aren’t interactive, as in users can’t tap through them or swipe up to go to another site, watch a video or play a game.

More than five months into the launch, buyers say they’re finding Snapchat Commercials are cheap not just for Snap, but in digital video overall.

“We have been very pleased by how competitive the CPMs have been. The CPMs are very efficient,” said Brent Mitchell, svp of marketing for E! Entertainment.

Snapchat Commercials cost about 1.3 cents per completed view. YouTube’s comparable product — a six-second format called Bumper Ads and sold via Google Preferred — has averaged above 2 cents, according to sources familiar with the product. Of course, that cost varies by demographics and targeting as they’re sold by cost per impression in the platforms’ auctions. YouTube recently said it would end unskippable, 30-second ads in favor of its shorter ads like Bumper Ads. But for now, Snap’s version is “cheap relative to alternative digital video, and Snapchat should be cheaper because of less competition, more available inventory and the benefit of exclusive real estate for this current window,” said media buyer at a global agency.

Snap initially sold the format directly. As of August, they’re available through Snap’s self-serve platform and advertisers have improved efficiency, targeting and measurement. More than 1,000 advertisers have access to that via Snapchat Ads Manager and can now buy Commercials within more than 100 different Snapchat Shows that have and will run in 2018. Average audience sizes for these Shows include E!’s “Face Forward” with more than 4 million unique viewers per episode, NBC News’ “Stay Tuned” with about 5 million unique viewers per day and Vertical Networks’ “Phone Swap” with about 10 million viewers per episode. Advertisers running Snapchat Commercials over the last month have included Hershey’s, McDonald’s, Chipotle, Sprint, Target, The CW, Universal Pictures as well as E! and The New York Times, both of which publish in Discover.

E! has treated Commercials as part of a larger buy on Snapchat. The network recently bought Snapchat Commercials for its campaign for the People’s Choice Awards, which is new to NBCUniversal. E! ran Snapchat Commercials during the show’s first phase of voting starting on Sept. 5 along with Snap Ads with the swipe-up feature that directed viewers to the voting site. Over recent weeks, it’s been focused on those Snap Ads, but it plans to bring back Commercials on Oct. 20 along with custom filters to remind people of the show’s airing date.

“We aren’t replacing other Snap products. [Commercials are] complementary, building awareness that the show is in November now and on E!. The unskippable feature is a really great tool for that kind of advertising,” Mitchell said.

As for the campaign’s effectiveness, Mitchell said that Snapchat users have been more likely to swipe up on a Snap Ad if they’ve also seen a Snapchat Commercial. Mitchell said the Commercials have reached “millions of viewers” during the first phase of the campaign.

The Times has been running Snapchat Commercials since the summer. In July, the company ran ads for its Truth campaign. In August and September, it bought ads for The Daily, its daily podcast.

“It’s great that [Snapchat is] offering this experience that’s somewhat interruptive but only six seconds. It’s the idea of taking a TV commercial but making it for mobile,” said Mike Schanbacher, senior paid social strategist at the Times.

The Times, which also produces a daily edition for Snapchat Discover, has purchased ads on Snapchat since late 2016, starting with geofilters, then Snap Ads and now Snapchat Commercials.

“Snapchat we’ve found has a very unique audience. People on Snapchat are not using other channels, watching TV, going on social networks or going on other websites. We run reinforcement pieces if we have a larger campaign going where you can reinforce the message on Snap,” Schanbacher said.

For E!, buying on Snapchat isn’t just about reaching young viewers. Although E!’s Snapchat Show “The Rundown” averages over 4 million unique viewers per episode, 65 percent of whom are under 25, E! targets its ads on Snapchat, including Commercials, to a wider audience.

“We really want to reach our core audience, which by TV standards is quite young. We want to reach all women. As Snapchat has grown, we’ve used it to mirror our main target demo,” Mitchell said.

Similar to the rest of Snapchat’s ad products, buyers can target based on demographics. The Times said it reached “news enthusiasts” while E! has aimed at young women interested in pop culture. Snap also allows buyers to blacklist channels or topics they don’t want their ads to appear alongside. The Times has avoided buying with the dating shows on Snapchat, Schanbacher said.

“On a brand campaign, we’re really happy with [Snapchat Commercials] so we’re trying to spend as much as we see reasonable. They are a little more expensive [than Snap Ads] so it’s a balance,” Schanbacher said. “Commercials will definitely be a part of our media mix going forward.”


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