FREE advertising on Snapchat as it tries to steal Instagrams market share

Snap – the company behind Snapchat is attempting to lure advertisers away from Instagram by offering them free advertising on Snapchat

Yes you heard that correctly, Snap is actually offering hundreds of pounds worth of free ad credit to advertisers who buy vertical video adverts on Instagram.

Snap needs advertisers, and where better to find advertisers than by looking at its biggest competitor Instagram. So it makes sense that they would turn their attention to attracting advertisers who are spending big money with Instagram in order to lure them over to their platform.

A Snapchat spokesperson confirmed that the company has indeed started reaching out to advertisers who are spending money on competing services, although it wasn’t confirmed how much those advertisers were spending on Instagram before they were approached.

Snap has an online application area where it is directing potential advertisers and that requires them to upload proof of purchase that they bought ads on a Snapchat competitor service “sometime within the past three months”.

According to the source, Snap is then offering those advertisers credits in the range of hundreds of pounds.

Snap needs to increase its revenue and particularly its advertiser base. Currently the way in which video advertisments are sold is done through a process called programmatic ad buying which is basically an automated software program that runs an auction and sells to the highest bidder. To read more on programmatic buying, here is a link to a blog post from our Cornwall branch from 2015 – A guide to programmatic buying and trading

The trouble for Snap is that there are not enough advertisers bidding on the ads because there are not enough advertisers on the platform, which means that the ones who are advertising are getting it on the cheap as no one else is bidding against them.

More advertisers would mean more competition and therefore higher ad prices and more revenue for Snap. Snap has tried to lure in advertisers before, it has a program called Snap Accelerate which gives special deals to VC backed startups that would like to advertise on Snapchat. Additionally Snap offered ad credits and discounts to advertisers just after its IPO.

This time however, it is quite amusing that they are targeting Instagram advertisers, particularly after Instagram stole Snapchats stories idea. Technically the advertising credit program is open to any advertiser who bought vertical video ads anywhere else online – but really, there aren’t many other places you can do that besides Instagram.

And the announcement from Snap has seen a sharp rise in the stock price this week, with Snap stock being up over 50%. With the company claiming $285 million in revenue when it reported Q4 earnings earlier in the week, up 72% on the same quarter last year, it seems like this is just the beginning for the rise of Snapchat.

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