HOW DOES SNAPCHAT MAKE MONEY?

SNAPCHAT BUSINESS MODEL

BY ROHIT
RIYA
ABOUT SNAPCHAT

 Released in September 2011, Snapchat, the ‘communicate and tell your stories
through pictures & videos application’ has a unique business model and a
revenue model that has tailor-made features for every partner, advertiser, and
users. Snapchat’s operating model is so simple yet different that the queries of
‘How does Snapchat make money?‘ and ‘Snapchat Business Model‘ are a new
trend on search engines.
SNAPCHAT BUSINESS MODEL

EVAN SPIEGEL HAS DESIGNED THE BUSINESS MODEL OF SNAPCHAT DIFFERENT

FROM ANY OTHER SOCIAL NETWORKING PLATFORMS. AS A RESULT, THE
APPLICATION IS SEEING AN EVER-GROWING USER-BASE BECAUSE OF THE
FEATURES IT PROVIDES.

WHAT IS SNAPCHAT?

JUST AS THE NAME SUGGESTS, SNAPCHAT IS A MOBILE APPLICATION WHERE YOUR

CHAT LASTS FOR A SNAP. YOU GET TO COMMUNICATE WITH YOUR FRIENDS AND
OTHER PEOPLE BY SENDING PICTURES, VIDEOS, AND TEXTS WHICH
AUTOMATICALLY DISAPPEAR AFTER FEW SECONDS.
SNAPCHAT GROWTH

May 2016 is $22 billion May 2019 $24 billion 

2016 2018 2019

The stock prices of Snap Inc., the

parent company of Snapchat, 
nearly doubled in April 2018 when it
rose from $5.79 to $11.28.
WHAT IS SNAPCHAT?

Before we get into finer details about Snapchat’s revenue model, let’s talk about the application first.
Snapchat is a social media application that got famous for its disappearing images, videos and text.

The unique aspect of Snapchat is that the recipient of a snap or text can only see them once
before they disappear.

This unique aspect made Snapchat popular among the millennials. People aged 13 years till 34
years old account for 60% of the user base of Snapchat.

Moreover, the app enjoys the royalty of being ranked 3rd as the most popular social media
application.
• Snapchat allows you to put up stories that can consist of images, videos,
ant text. These stories are available to your friends and other people
depending on the privacy settings.

• After 24 hours, the stories are deleted from your account. However, you can
choose to save these stories in your ‘Memories’ so that you can view them
later as well.

• Other than this, you have a ‘Discover’ section in Snapchat that helps you to
stay updated with latest news and stories from celebrities and different
users.
Features of Snapchat?

Snapchat does its business smartly. The extensive use of analytics helps them to
bake in features that the users like. These analytics are part of Snapchat
business model that helps in revenue generation.
These Are :
Discover
Stories
Live Stories
Snapchat lances
Shazam
Filters
DISCOVER
The discover section includes stories from
various publishers around the world who put up
their content over there. This section includes
publishers like BuzzFeed, VICE, MTV, National
Geographic etc.

The user can subscribe to these stories to pin

them on the top of the Discover section.

You can find all kinds of content in the Discover

section. There is something for everyone.
 • This is the feature that sets Snapchat
apart from other social media
application. Curate a story by adding
images and videos. Your story lasts for
24 hours and your friends can view it.
• Furthermore, your friends can reply to
STORIES your stories as well. If they take a
screenshot of your story, you also get a
notification.
LIVE STORIES

Live stories is a feature that allows the users in the same

location or event to add snaps to a story. Basically, it is a
story curated by many users. It is a fun way to bring the
Snapchat community together.
 Snapchat Lenses
Many users love this cool feature.
These lenses add a creative twist to the
pictures and videos of the Snap
chatters. Snapchat roles out new lenses
according to the events at hand.
Shazam

Snapchat has joined hands with Shazam to

help the user base to identify the songs on
the go. Hold the camera interface so that
Snapchat can listen to the song and save it to
your database. You can then send the song to
your friends.
SNAPCHAT FILTERS
The application also has a
host of filters that you can
apply on your snaps.
Some of these filters are
geo-sensitive. You can
use these filters when in a
certain location such as
cities, museums, events
etc.
 Snapchat Business Model: How is Revenue
Generated?

• Snapchat, like Google, uses advertisements as a

means to make money. These advertisements
are packaged with the features in the
application.
• Nobody likes watching ads. However, if they
are sold as features to the users, they would not
mind the ads. This is just what Snapchat does.
 Snapchat Business Model Uses Sponsored Geofilters
• Geofilters are frames that can be added to snaps during certain occasions or in
locations. Companies and event administrators collaborate with Snapchat to
create geofilters that are then used by users.

• When users apply the geofilter, the filter acts as an ad. Snapchat charges the
company for these geofilters. Moreover, other people can make geofilters as
well.

• Also, it is very common to have geofilters for weddings or other similar

occasions. They charge a fee to create a geofilter.
Snapchat Business Model and Sponsored Lenses

• Snapchat is well-known for employing augmented reality in their

lenses. The AR technology increases the possibilities when it comes to
creating lenses.

• They have partnered with the likes of Taco Bell, Gatorade etc. in the
past to create lenses. Furthermore, these lenses help to drive up sales
for the partner companies. They tailors lenses for each company and
make money from these partnerships.
Snapchat Business Model and the Discover Section

• The Discover section is flooded with fun stories and news. You can use this space to
find stories that interest you. Content creators pay Snapchat to reserve a spot in the
Discover section so that they can advertise their content.

• This particular feature makes sure that a user spends more time on the application.
The stories and the news change daily. Hence, there is always something new to
browse.

• The publishers pay good money to get a chance to reach out to the huge user base of
Snapchat.
 Conclusion
Snapchat is getting bigger than ever. Their
user base and shares have been growing on
the daily. They use advertisements to make
money. These advertisements are baked in to
the features of the application so that they do
not overwhelm the user.