Ever wondered how does Snapchat make money despite being a free app for users?

Let’s go to the history, in order to get the answers.

In the decade in which we live, a colossal portion of us is dedicated to online living. There is no wonder in the fact that, in less than a generation, Snapchat has been fueled by the human impulse to communicate with utmost security.

According to a survey, approximately 73% of adults use Snapchat. And, it is highest among the other social media platforms.

The journey of Snapchat by three Havard Students has taken the world by surprise. Within the time span of 5 years, Snapchat was renowned as a camera company.

Though this social media platform is free to use, we have come across a few questions from the clients like what is a Snapchat business model or how does Snapchat make money and it goes on.

It is one of the core reasons why we came up with this blog. Here you will find everything about the Snapchat app right from its origin to how does Snapchat work, the Snapchat business model, and a lot more.

We’ll begin digging into Snapchat!

What is Snapchat? – Framing its Success

Back in 2011, the Snapchat app was founded by three university students -Evan Spiegel, Reggie Brown, and Bobby Murphy as we mentioned above.

Snapchat was built with a unique idea that made it stand expectational and gave tough competition to the social media app giants like Instagram and Facebook.

While the rest of the social media apps were busy chatting, sharing and saving photos. This social media platform came up with Snapchat filters that revolutionized how people take pictures and shoot videos.

It was a unique concept invented by Snapchat on the face.

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DO YOU KNOW?

Evan Spiegel wrote in its first-ever Snapchat blog explaining the rationale behind the scenes,

“And after hearing hilarious stories about emergency detagging of Facebook photos before job interviews and photoshopping blemishes out of candid shots before they hit the Internet (because your world would crumble if anyone found out you had a pimple on the 38th day of 9th grade), there had to be a better solution.”

The best part of Snapchat is it is not just about capturing a traditional kodak moment but it covers the broad spectrum of human emotions.

Another key thing that played a significant role in the success of Snapchat was “Snapscore”

Here is a short glimpse of how does snapscore works, and how it took over the minds of social media users.

How Does Snapscore Work? – The Most Unique Snapchat Feature

In simple terms, your Snapscore is an indication of how active and social you’re on the Snapchat app. Your snapscore is calculated based on the number of pictures and videos you take in a day.

Also, you get bonus points when you share the snap with multiple people at once. Although, Snapchat has declined to share any further information on how Snapscore is calculated.

You might get bored of just reading out the things, henceforth we’ve tried to bring the entire journey of Snapchat into one picture.

Peep into the below image to know some interesting facts about Snapchat.

interesting facts about Snapchat

We know that after checking on the growth journey of Snapchat, the very next question coming to your mind would be – how does Snapchat make money regardless of being a free app for Snapchat users.

No worries, we have an answer for you.

Snapchat business model stays unique among most social media apps. And, that is one of the reasons why businesses and startup enablers are more interested to know about how Snapchat makes money.

However, if you’re planning to build an app like Snapchat then before understanding the Snapchat revenue model, it is essential to study how does Snapchat work.

Let’s take a ride onto the working of Snapchat.

How does Snapchat Work? – A Must Know Thing

How does Snapchat Work

The working of Snapchat is quite simple. All you have to do is sign up and build your unique Id. And here you go. (Anyone above the age of 13 can use Snapchat)

One more thing to draw attention here is you cannot change your Snapchat user name once the signing process is done. Later on, you can start adding your friends to share your videos, pictures, and a lot more.

Most Snapchat users are overwhelmed with the feature called “SnapStreak”. Wherein, you get points for sending pictures and videos every day to your friends. Another thing over Snapchat is instant messaging with utmost priority. As your all messages will disappear once seen or within 24 hours.

In fact, if someone is taking a screenshot of your picture or chat, you will get a notification. The features like a spotlight, Snap filters, and discover are gaining traction as captivating pastimes.

Snapchat business is another prime thing to gain user attention. Spotlight enables Snapchat users to create amazing content, and get paid for the same.

All of the above, it is also working as a battleground for the gamers that too without any distraction from ads.

With that, it also launched lenses and geofilter, wherein you can customize them and share them with other users.

Besides, a few lucrative features of Snapchat are;

Snap Map

You can check out the location of your friends via Snap Map. Also, just by clicking on any location on the map, you can check out the restaurants in the area with their reviews.

Scan

Snapchat has made partnerships with many popular brands in order to allow users to scan a product and get the needed information. A few brands over here are Amazon Camera Search, Shazam, PlantSnap, Dog Scanner, Photomath, and many more,

Snap Originals

It brings some of the most amazing storytellers to its users by specially designing it for Snapchat. Originals come up with their own tasks to create an episode of a few minutes on the virtual network.

Sponsored Lenses

This allows users to have fun by creating beautiful pictures with the help of augmented reality. Many companies collaborate with Snapchat sponsored lenses in order to build a custom one for their brand marketing.

“Taco Bell Paid $75,000 for 24 Hours of the Taco Lenses/Filter/Snap Ads”

Stories

An amazing feature that has taken over the mind of the people. Snapchat stories let you tell the world about your day to the world via photos and videos. It remains on your profile for 24 hours.

That’s all on how does Snapchat work. Now it’s time to jump into the revenue model of Snapchat.

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How does Snapchat Make Money? – Snapchat Business Model Explained

Coming to the most interesting part of the article i.e. how does Snapchat make money?

Let’s start with the advertising model of Snapchat.

Basically, Snapchat follows two advertisement models for revenue.

1. Self-Service Advertising

In this Snapchat ads model, businesses can reach out to their users by creating various ads via the ad manager tool Snapchat. You can follow either of the two payment systems here – first by paying per 1000 impressions (CPM) or goal-based bidding.
Besides, advertisers can pay per bid. The minimum bid per day starts at $5. We can say that with goal-based bidding you can have better control on your spending. Also, you can achieve maximum results with the bidding model.

Bonus Point:
Snapchat not only allows you to create ads but also enables you to constantly monitor how well ads campaigns are doing. Henceforth, you can have better judgements about spending money on Snap ads.

The aim of the advertisers is to let users download their application, complete a purchase or watch some videos on products.

2. Purchasing Ads Directly

The big giants do not want to spare much time in developing ads via the ad manager tool. Therefore, they go directly to Snapchat. SnapAds and sponsored lenses are the two ways of Snapchat direct ads.

The video advertising starts from $3000 per month. Whereas, Snapchat lenses build millions of snaps sent each day and come with a variety of pricing models.

  • $450,000 per day, Sunday-Thursday
  • $500,000 per day, Friday and Saturday
  • $700,000 per day for holidays and special events

Another thing businesses can do over here is advertising with the help of discovery ads. With this, brand titles are placed in the discovery section. Such campaigns start with the pricing model of $50,000 per day.

Do You Know?
60% of Snap Ads Are Played with Audio (Compared to 15% for Facebook!) Also, Video Ads on Snapchat Create Twice as Much Purchase Intent Than Other Ad Formats

There are two advertising models that hold more than half a portion of Snapchat’s revenue. Let’s have a look at other parts of how does Snapchat make money.

Snapchat Business Model

Snapchat Business Model

As we already mentioned that Snapchat does not charge a penny to their user nor do they have any subscription or premium services.

Thence, we can say that the main source of revenue for Snap Inc. is via the different advertising models. Here is a list of a few aspects that add to the revenue of Snapchat.

  • 5% revenue comes from the sale of Snap Spectacles
  • Spectacles 3 are currently selling for $380 a pair
  • Snapchat posted 13% year-over-year revenue growth in Q2 to $1.1 billion in 2022.
  • Snap’s daily active users (DAUs), as well as its average revenue per user (ARPU), grew in Q1 2022 compared with the year-ago quarter. The company had an average of 332 million DAUs in the three-month period.
  • Advertising revenue generated by Snapchat worldwide from 2017 to 2026 (shows the below graph)

Advertising revenue generated by Snapchat worldwide

To put the whole thing short, Snapchat’s 99% of its revenues come from its advertising models, and the rest one per cent comes from Spectacles & others. The below graph shows various niches and percentages they add to Snap Inc.’s revenue.

Distribution of Snap Ad Revenue-min

That’s all on how does Snapchat make money. So, are you tempted to build a social media app like Snapchat? Get your mind clear by reading below!

Read also: How to Make a Social Media Application?

Can You Build An App Like Snapchat?

The use of social media is increasing as rapidly as the speed of light. And, in that case, developing a social media app like Snapchat can do wonders for your startup.

In fact, it has become much easier to start with your own social media app. You have two options over here. Either you can build an app from scratch or you can go for the clone app development solutions.

If you wish to launch the app in the least time then clone app development solutions are suitable for you. However, for an entirely new social media app idea, developing it from scratch is an ideal choice. Based on your mobile app idea and requirements, you can choose any of the following.

Though if you’re confused about which process to follow in your mobile app development. Get in touch with Excellent WebWorld. One of the best mobile app development companies with years of experience.

How Excellent WebWorld Helps You In Mobile App Development?

Excellent Webworld is an experienced mobile app development company. The professionals over here thoroughly analyze and study your app idea in order to serve you with the best possible solutions.

The mobile app development process plays an important role in the success of an application. Henceforth, our professionals never fail to follow the process to come up with lucrative app solutions for clients.

With the app development process, we do focus on mobile app development team structure in order to achieve the goal in the given timeline.

A few mobile app development services by Excellent Webworld:

  • Android App Development
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  • App Consulting Services
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Get in touch with us for more information!

The End – How Does Snapchat Make Money?

So, here we end the article. We hope now you’re clear with the two most trending questions on Snapchat i.e. How does Snapchat Make Money & How Does Snapchat Work?

Be it geofilters or lenses or privacy, Snapchat has come a long way with its amazing and unique features. If you’re planning to build a social media app, then remember a thing – adding unique features is your key to success and gaining user attention.

Have a word with our experts to brainstorm your app idea!