Snapchat market capitalization is more than some listed technology companies owing to 150 million daily active users and $17 billion estimated value, such as Twitter and Yelp.
Snapchat aims at obtaining $ 300 million in revenue for this year, while it set $50 million as goal last year. Snapcaht promised to its investors that its business scale will be up to $ 500 million –$1 billion by 2017.
How Snapchat plan to make profit then? It will carry out the same strategy as other technology companies such as Google and Facebook, that is, advertisement.
Snapchat displays many ads in the key locations of its interface.
Discover: users can view the ads through the channel that Snapchat created with its cooperative partners.
Stories: Snapchat adds advertisements in Live Stories and Stories that made by users. It meant that users can watch the ads when they switch to different friends.
Filter: Snapchat will offer filter service for specific activities, such as Recode conference and Taco Bell sponsor activity.
Snapchat faces challenges from two aspects. On the one hand, Snapchat is hard to measure whether the ads it offers to advertisers succeed or not. If users spent money on ads, then they would like to know the effects. So far, Snapchat has not offered a better measurement.
On the other hand, Evan Spiegel doesn’t like the advertisement pointing technology based on users. The attraction of digital advertisement is that marketers wish to know who it aims at.
Snapchat refuses to make customized and personalized advertisements. It will be a challenge for its future development.