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When did Snapchat start using ads?

When did Snapchat start using ads?

Snapchat is a popular social media app that allows users to send photo and video messages that disappear after being viewed. Since launching in 2011, Snapchat has grown to become one of the world’s most popular social platforms, especially among younger users.

One of the app’s defining features initially was that it did not have any advertising. However, as Snapchat’s user base expanded rapidly, the company eventually introduced ads on the platform as a way to generate revenue. This article will provide an overview of when and how Snapchat began to incorporate advertising.

Snapchat’s Early Growth

Snapchat was founded in 2011 by Evan Spiegel, Bobby Murphy, and Reggie Brown as Picaboo. The app allowed users to send photo messages that would disappear after being viewed once by the recipient. This gave a sense of privacy and ephemerality that made Snapchat stand out from other social platforms.

The app quickly caught on among teenagers and young adults. By the end of 2012, Snapchat was processing over 200 million photos per day. This early growth was fueled by social sharing among friends and word-of-mouth promotion in youth-oriented social circles rather than traditional advertising.

Some key stats on Snapchat’s early growth:

  • Launched in September 2011
  • By May 2012 – 25 photos shared per second
  • By November 2012 – Over 1 billion snaps had been sent
  • By December 2012 – Over 200 million snaps per day

This initial boom in usage established Snapchat as a major player in the social media landscape. However, the company did not immediately start monetizing the app with advertising, as it focused first on growth.

Snapchat’s Advertising-Free Early Years

For the first several years after launch, Snapchat remained an advertising-free platform. The app continued to gain users rapidly without running any ads.

There were a few factors that enabled Snapchat to postpone adding advertising:

  • Rapid organic growth – The app spread quickly among teens even without paid promotion.
  • Low overhead business – Hosting costs were minimal compared to other social platforms.
  • Focus on product development – The company dedicated resources to building out features.
  • Small team – Snapchat’s team remained lean in the early years.

Essentially, Snapchat was able to establish itself as a thriving social network while avoiding advertising for a few key years during its launch.

Some metrics from Snapchat’s early advertising-free period:

  • By February 2013 – Over 60 million snaps sent per day
  • By April 2013 – Over 200 million snaps sent per day
  • By October 2013 – Snapchat users sharing over 350 million photos per day

The company’s avoidant stance toward ads in the early years was summed up in CEO Evan Spiegel’s view that “Advertising always ends up feeling like it’s interrupted the experience for users.”

When Did Snapchat Introduce Advertising?

Snapchat ultimately introduced its first advertising in mid-2014.

In June 2014, Snapchat debuted its first ads through a product called Snapchat Story Ads. This enabled companies to display short video ads that users could optionally view by clicking on sponsored content scattered among their friend Stories.

The launch of Snapchat Story Ads marked the end of Snapchat’s advertising-free era. The motivation to add advertising included:

  • Monetizing Snapchat’s extensive user base
  • Diversifying revenue
  • Helping brands connect with Snapchat’s young demographics

While this was a pivotal moment, Snapchat’s advertising capabilities remained fairly limited at the start. But it signaled the beginning of Snapchat integrating ads into the app experience.

Key Dates

Here is a timeline of when Snapchat rolled out major ad products:

  • October 2013 – Sponsored Lenses allow brands to create AR Lenses
  • June 2014 – Launch of Snapchat Story Ads
  • January 2015 – Introduction of Discover channels with branded content
  • April 2015 – Launch of sponsored Geofilters that can be purchased by brands
  • October 2015 – Snapchat makes full-screen vertical video ads available

2014-2015 marked the period when Snapchat rapidly built out its advertising capabilities. While starting slowly with Story Ads, the company soon added a range of ad products and options.

How Does Snapchat Advertising Work Now?

In 2022, advertising makes up the bulk of Snapchat’s revenue. The company has continued expanding and enhancing its ad products over the years.

Some key types of ads now available on Snapchat:

Snap Ads

– Full-screen vertical video ads that appear between Snapchat content

Sponsored Lenses

– Branded AR lenses that users can activate to overlay effects on their Snaps

Filters and Geofilters

– Custom location-based filters and Geofilters that users can add to their content

Story Ads

– Video ads that appear in between friends’ Stories

Discovery Ads

– Video and display ads that run in the Discover section

Collection Ads

– Scrollable ads that showcase multiple products

Dynamic Ads

– Automatically generated product ads that target users based on browsing history

Snap Ad Manager

Snapchat provides an ad manager tool for businesses to manage ad campaigns and track performance. Key features include:

  • Automatic bidding to optimize campaign delivery and cost
  • Granular targeting options by demographics, interests, and behaviors
  • Flexible budgeting with daily caps or lifetime budgets
  • Reporting on impressions, views, swipes, conversions

Snap Ads make up over half of Snapchat’s revenue, and Snap continues to innovate on formats to drive performance for advertisers.

The Impact of Snapchat’s Advertising Business

The addition of advertising fundamentally altered Snapchat’s business model and revenue composition. Here are some of the major impacts.

Revenue Growth

Snapchat’s revenue has grown enormously since ads were introduced, from minimal revenue to billions in annual ad earnings.

Year Revenue
2012 (pre-ads era) $4.3 million
2015 (early ads) $59 million
2018 $1.18 billion
2021 $4.12 billion

Public Offering

The growth of Snapchat’s ad business enabled the company to pursue an initial public offering. Snapchat’s parent company Snap Inc. held its IPO in March 2017, valuing the company at over $33 billion at the time.

Stock Price

Snap’s share price has had its ups and downs but reflects the market’s confidence in its revenue potential. The stock debuted at $17 per share at the IPO and reached a high of over $83 per share in late 2021.

Increased Focus on Metrics

With advertisers paying for campaigns, Snapchat has had to focus intently on demonstrating strong active user metrics, engagement, targeting capabilities, and ROI.

Shift in Corporate Culture

Transitioning to being an ad-supported business changed priorities and workplace culture, with increased emphasis on revenue goals.

Conclusion

Snapchat remained free of advertising for its first few years, able to grow rapidly as a lean startup without an ad-based business model. However, since introducing its initial ads in 2014, advertising revenue has become the dominant force propelling Snapchat’s business forward. Snapchat’s long-term plan appears to be increasing integration of advertising to fund constant innovation on social features. With the right balance, the company aims to maintain the app’s fun and ephemeral vibe, even as ads contribute an ever-larger share to its bottom line.