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How Snapchat's CEO Plans to Conquer the Advertising World

How Snapchat s CEO Plans to Conquer the Advertising World Adweek


Evan Spiegel admits to being a little nervous ahead of his first trip to the Cannes Lions International Festival of Creativity. That's understandable. At 25—an age when many college grads are still backpacking around Europe—the founder and CEO of Snapchat has been given top billing at one of advertising's biggest events.

In a way, it represents an introduction to the ad world for the young company, a social media darling founded in 2011. Snapchat has built an addictive and innovative product that reaches an elusive but alluring audience, and now it must build a billion-dollar business out of it.

"Anytime you do something for the first time, it's nerve-racking," Spiegel confesses in a conversation with Adweek just ahead of his trip to this annual gathering for the advertising elite on the French Riviera. "And I've never built an ad business before."

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Snapchat is trying to get the world to adopt vertical videos.

Spiegel will be coming at the ad industry with a whole new perspective—literally. The CEO will be talking at Cannes about one of the key changes Snapchat has inspired in digital video: to think vertically. He and many other social, mobile and video players are beginning to detect that "people just don't rotate their phones," he says. That's why advertisers that have been first to test-drive marketing on the app see a reported nine times more engagement when their ads are vertically oriented.

When video is shot in landscape (horizontal) mode, it only takes up a small space in the center of a vertical screen until the viewer turns the device on its side. And really, who can be bothered? "A lot of folks in the transition to mobile—which is still ongoing—were taking video that was formatted for livestream desktop and TV, and they were jamming that creative into a mobile feed," Spiegel says. "That makes sense in the evolution from desktop to mobile, but since we started on mobile, it's a blank canvas … Our baseline was, [we want] full screen. And in order to get full screen, you've got to do vertical video."

Snapchat delivers this new style of verticality in all its content—messaging, Live Stories and Discover channels. The messaging is for users to send photos, videos and drawings back and forth. Live Stories are crowdshared videos from around the world and at important events. The Discover channels are published daily by select media partners like Cosmopolitan, Daily Mail, Vice, ESPN and Comedy Central.

After a few ad experiments and price adjustments, Snapchat now sells sponsored video space in Discover and Live Stories, and recently ran a branded story with Bud Light. The video ads are priced competitively compared to rivals like Instagram, at $20 for every 1,000 views.

It's an adjustment that had to happen. One digital buyer who has a close relationship with Snapchat's publishing partners and advertisers says the company is starting to get pricing right after first asking for too much. Snapchat was offering $750,000-a-day packages but has since become more affordable. "They embraced prices coming down," says the exec.

Advertising is definitely starting to roll in. McDonald's and Samsung have come aboard, while Macy's recently sponsored People's Discover feed. Movie studios are also playing with the app. The big summer releases Mad Max: Fury Road, Pitch Perfect 2 and Jurassic World all were heavily promoted on the app.

Speaking on the condition of anonymity, the buyer says Snapchat is starting to live up to its potential in social media marketing. "It's actually quite a mature company," the exec adds. "A lot of companies come out and don't have their acts together."

Microentertainment and syndication go hand in hand:

Cosmo gets 1.82 million Snapchat viewers each day and attracts sponsors like Maybelline. That's a big daily audience for the Hearst publication, whose website attracts as many as 40 million unique visitors every month. Coles says that Cosmo handles most of the ad sales on its Discover channel. Partners split revenue with Snapchat. "The beauty of content on Discover is it's sort of short and it's curated to be experienced in a certain way," the editor says. "It's perfectly devised for a cellphone."

Publishers like Cosmo and Daily Mail are branching out in all digital directions, staking out any audience they can find, whether from Facebook's Instant Articles or Apple's newly launched News app. These are the platforms with the most stylish layouts and interactive features for publications and marketers.


Snapchat's pitch stresses the impact of full-screen ad units on mobile compared to the in-feed units on apps like Facebook, Instagram and Twitter. Snapchat is getting about 35 million users ages 13-34 each day in the U.S., a number that, it says, approaches the TV audience for the same age group. (For example, ABC's recent broadcast of the American Music Awards got 3 million viewers 13-34, while a Snapchat Live Story about the event drew 11.5 million.)

It is such numbers that make Gian LaVecchia, head of digital content marketing at MEC Network, a believer. "I'm really bullish on Snapchat," says LaVecchia. "It's not sleeping anymore."

And the ad world seems eager to get a glimpse of what Snapchat might do—and not do—at Cannes. The time is right, given the company's elusive sales presence, says Chris Tuff, 22squared's evp and director of business development and partnerships. "They're like a unicorn, that team everyone wants to get in front of but can't find because they're in such high demand and are spread so thin," as Tuff puts it. "Last year, it was Pinterest. Now, it's Snapchat's turn."

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