Following the initial announcement in April, Snapchat has now officially rolled out unskippable six-second adverts called ‘Commercials’ on its platform to users watching content on the Discover and Shows channel.
Details and Implications:
This week, Snapchat users saw unskippable ads for the first time, meaning that they saw ads they couldn’t tap out of, promoting movies like Deadpool and Adrift and products including Samsung’s new Galaxy S9 and Snapple drinks.
Since filing for IPO in March 2017, with an original ad business based on a voluntary viewing program, stocks have fallen over 50%. A $40m+ loss was registered on the ill-fated Spectacles product and then there was the redesign, that thanks to the protest of millions, was rethought. So, it is fair to say that Snapchat needs a win and it will be hoping that a more traditional unskippable ad format will be just that.
The new ad feature is also a way to address the lack of ad attention on the platform, with the average time users watched an ad on Snapchat down to two seconds. Advertisers are now guaranteed a six second view thanks to the unskippable format.
The new format will only be deployed ‘midroll’ in the Discover and Show sections, so those using the platform for Snaps with friends and family won’t see the unskippable ads.
Unlike skippable ads, which advertisers don’t necessarily have to pay for on Snapchat – if a user was to skip an ad displayed on Snapchat within the first second, Snapchat wouldn’t charge the advertiser – the new unskippable ad format means guaranteed payment every time and so the ability to charge a higher CPM.
Ads using the new format don’t currently include hyperlinks or the ability to interact with the advertiser, meaning that users wanting to interact with the brand or find out more, will have to leave the app experience and search online to find more information – mimicking the linear TV experience.
There is a certain amount of irony that the poster child for the millennial generation has launched an ad format that is much more familiar to Generation X. But the reality of the need to give advertisers a stronger ad offering and to boost revenues is driving this change.
These unskippable ads are only found in the premium part of the Snapchat app, which further creates a divide between those who Snap with friends and those who use Snapchat as a content discovery platform. With YouTube, Apple, Amazon et al all launching premium and subscription content services around Music, News and Entertainment, it’s no surprise that Snapchat is in the same market and looking for ad revenue.