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How much should I spend on Snapchat ads?

How much should I spend on Snapchat ads?

Determining the right budget for Snapchat ads can be tricky for businesses new to the platform. Snapchat now has over 300 million daily active users, many of whom are in the coveted 13-34 demographic. This makes Snapchat a prime area for brands looking to reach younger audiences. However, you need to put some careful thought into setting your Snapchat ad budget in order to get the best results from your campaigns.

Factors that Determine Your Snapchat Ad Budget

There are a few key factors you need to take into account when deciding how much to spend on Snapchat ads:

Your Business Goals

What are you hoping to achieve from Snapchat ads? Are you looking to drive brand awareness, website traffic, online sales or app installs? Your goals will impact how much you need to spend. If you simply want to get your brand in front of Snapchat users, a smaller budget could work. But those looking for direct-response goals like getting users to purchase products may need to invest more in their campaigns.

Daily Budget vs Lifetime Budget

On Snapchat Ads Manager, you can set either a daily budget or a lifetime budget for your campaigns. A daily budget caps how much you can spend per day, while a lifetime budget is the maximum you’re willing to spend overall on a campaign.

If your goal is to drive continuous brand awareness and exposure over an extended time, a daily budget makes sense. But if you are running a limited-time campaign, you may want to choose a lifetime budget instead. Generally $50-$100 per day or $1000-$2000 lifetime are reasonable starting points.

Your Target Audience Size

How broad or narrow is your target audience on Snapchat? If you have a very focused, niche audience, you may be able to achieve results with a smaller ad budget. But if you’re trying to reach a more general audience, it will likely cost more to get your ads in front of enough relevant users. Conduct audience research on Snapchat to get a sense of your potential reach.

Ad Competition

Study the other brands and businesses advertising to your target users on Snapchat. More competition means higher advertising costs. If you’re entering an area with lots of competing ads, you may need a higher budget to stand out and be effective.

Ad Type

Snapchat offers several different ad formats. The type you choose will impact costs:

  • Lens Ads – $450,000+$ for national campaigns
  • 3D World Lenses – $250,000+ for national campaigns
  • Commercials – $100,000+ for premium nationwide placements
  • Snap Ads – $100-$500+ per day for well targeted campaigns
  • Story Ads – $50-$500+ per day
  • Filters & Lenses – $50-$500+ per day

As you can see, Snap ads, Stories and Filters are very affordable starting at $50 per day, making them accessible for small businesses. But achieving national reach with Lenses or Commercials requires serious budgets above $100k. Know which formats help you achieve your goals at your budget level.

Targeting Specifics

The more precise your targeting, the lower your costs will be. Targeting by age, gender, interests, behaviors, and other filters can help you hone in on the users most likely to engage with your brand. Invest time in setting up your targeting for the most cost-efficient campaigns.

Benchmark Data for Snapchat Ads

Here are some benchmarks around Snapchat ad performance that can inform the right budget for your campaigns:

CPM Rates

CPM stands for “cost per thousand” and represents how much you pay for your ads to be shown to 1,000 Snapchat users. Here are average Snapchat ad CPM rates:

Ad Format Average Cost
Commercials $20+
Lenses $10-$20
Snap Ads $8-$15
Story Ads $7-$12
Filters $5-$7

These benchmarks give you an idea of the relative costs for different ad options. Commercials are most expensive while Filters are cheapest for reaching 1,000 users.

Engagement Rates

Engagement rate measures how many people interact with or respond to your ads. Here are typical Snapchat engagement rates:

Ad Format Engagement Rate
Lenses 1-2%
Filters 2-3%
Commercials 3-4%
Snap Ads 5-10%
Story Ads 10-25%

Story Ads tend to see the highest engagement. But even at 1-2%, a branded Lens can reach millions of users. These benchmarks demonstrate the reach potential of Snapchat’s unique ad formats.

Average CPC Rates

CPC stands for “cost per click” and is how much you pay when someone clicks your ad. Here are typical Snapchat ad CPC rates:

Ad Format Average CPC
Lenses $0.10-$0.30
Filters $0.05-$0.20
Snap Ads $0.30-$1.00
Story Ads $0.15-$0.40
Commercials $0.20-$0.60

These CPC benchmarks demonstrate the range of costs to expect for driving clicks to your site, app or ad—useful for budgeting direct-response campaigns.

Tips for Setting Your Snapchat Ad Budget

When determining your Snapchat ad spend, keep these tips in mind:

Start Small

Don’t blow your entire marketing budget on untested Snapchat ads. Begin with small daily or lifetime budgets and make adjustments based on performance. Let Snapchat’s optimization tools work before radically changing your spend.

Test Different Ad Types

Experiment with Snap Ads, Commercials, Lenses and other formats to see what resonates most with your audience and goals. Don’t rely solely on one option.

Watch Your Results

Closely monitor metrics like impressions, reach, engagement rate, CPC, conversions and ROI to gauge performance and make informed budget decisions.

Use Competitive Research

See what competitors are doing with their Snapchat ads in terms of targeting, creative, formats and budgets. Learn from their successes and failures.

Adjust Your Targeting

Refine your targeting over time to eliminate areas that aren’t delivering results. Tight targeting will help control ad costs.

Take Advantage of Discounts

Snapchat routinely offers discounts or free ad credits for first-time advertisers. Sign up to stay on top of promotions that can stretch your budget further.

Schedule Your Ads

Run your ads during primetimes when your audience is most active on Snapchat. Avoid overexposing your ads or showing them at ineffective times.

Automate Your Bidding

Use Snapchat’s auto-bidding features to put your budget to work at optimal rates efficiently. But keep a close eye on performance.

Analyze Your Metrics

Use Snapchat’s reporting to understand your return on ad spend. Stop campaigns not contributing to your goals and reallocate to better-performing ads.

Conclusion

Determining the ideal budget for Snapchat ads requires a strategic approach based on your specific goals, target audience, campaign creative, competitive landscape and performance data. While there are no set-in-stone rules, benchmarks show that $50-$100 per day or $1,000-$2,000 lifetime budgets are reasonable starting points for smaller brands.

The most important thing is to begin testing Snapchat ads on a small scale, analyze your results, refine your targeting and creative, take advantage of promotions, automate where possible, and scale up thoughtfully as the platform proves effective for your business. With patience, optimization and keen metric analysis, Snapchat ads can become a powerful addition to your social and digital campaigns.