14 DAY TRIAL // Four years after its initial launch, Snapchat is reportedly preparing for an IPO and has now announced some major changes, most of them focused on introducing an advertising API and inserts between stories shared on the platform.
The company will reportedly insert ads inside the application, and in addition to that, it has developed an intricate plan to increase profits off its 150 million daily users, according to AdWeek.
Snapchat thus intends to introduce ads between stories when users auto-advance at the end of one person’s stream to the next user. The ads will have a random occurrence rate.
Moreover, Snapchat will be coming up with expandable snap ads, which allow users to install promoted applications, watch videos, access websites or view articles formatted specifically for the platform. The Ads API will enable advertisers to buy campaigns and thus make it easier to post ads on Snapchat.
The team at Snapchat seems to have at least some measure of appreciation for its users, and it intends to review the quality of all ads.
The company has even developed a strategy to connect advertisers with a directory of ad tech developers and management tools for firms to better target users, based on their demographics.
Snapchat aims at significantly increasing its yearly revenues
Snapchat estimates that the new ad platform will increase the click-through rate 5 times compared to similar apps. In addition to these advertisement changes, Snapchat also redesigned some app sections about a week ago and provided users with a fresh UI.
The move also made it easier for Snapchat to push friends’ stories and Discover material from editorial partners, which should result in additional revenue for the company.
Snapchat reported $59 million in revenues last year, and it forecasts it will reach between $250 million and $350 million in 2016, and up to $1 billion in 2017. The numbers are more than optimistic, and today's ads-related announcement might not be enough to reach them.