How does Snapchat Make Money? Revenue Model Exposed

Avantika Shergil By Avantika Shergil  |  Dec 29, 2022  |  App Development Business Strategy Startups
how does snapchat make Money

According to stats giant Statista, Snap reported over USD 1.1 billion in just the third quarter of 2022. If you think how much money does Snapchat make; you will be surprized to know that despite the pandemic that hit almost all industries and businesses, in 2021, Snap’s annual revenue accounted for approximately 4.12 billion US dollars. With such lucrative figures, many individual entrepreneurs and MNCs head toward mobile app development companies to build a Snapchat-like application to lead the market.

If you still have a second thought to develop such an app, let us put a bee in your bonnet by revealing the Snapchat business model to know how Snapchat makes money.

What is a Snapchat Application?

This marvellous application had been the brainchild of three Harvard students who took the world by storm with their unique idea of entertaining mobile users like no other before. Renowned as a camera company, Snapchat came way ahead of its traditional impression and today it has been used by more than 70% of adults worldwide.

Looking at the popularity of Snapchat app, enterprises have been contacting any entertainment app development company from outsourcing hubs such as India and USA. The sole purpose is to build a customized app like Snapchat. And, if you are one of them, there is no harm! Indeed, Snapchat is an epitome of entertainment app proving that if you provide great fun, the people would love it.

How did Snapchat shoot to fame? Snapchat’s popularity and stats

While others were busy chatting and sharing boring photos, Snapchat brought a revolution in editing photos through its amazing filters features that would work live on the camera. Since then, most social media giants have been trying to imitate Snapchat like filters and stickers. Snapchat offered something that no other social media app development could include earlier.

snap ad revenue distribution

Snapchat customized its videos with two astounding features – Stories and Chat. What is common in social media app development today had been thought by Snapchat years back and that made it a well-liked app, especially among youngsters. Ever since Snapchat has been a strong competitor of all other social media apps combined!

How does Snapchat work?

What makes the best Snapchat revenue model is its functionality – the mechanism, the way this stupendous application work. Here are a few factors that build a solid foundation for the app’s high-revenue business model. Snapchat works through its impressive features that retain users on the app and the more they interact, the more business is assured.

Snapscore

Snapscore has been Snapchat’s flagship feature that pushes users to stay online and on the app for more and more time. Smartly introduced as an indicator of how much you ‘love’ Snapchat, Snapscore is a way to boast about yourself on the app: the number of pictures and videos you take would increase your score and you can flaunt among other users. Such a clever move would assure the engagement of millions of users and hence any revenue model they roll would surely have fairer chances to penetrate users’ minds.

Snap Map

Snap Map is the feature through which users can find the locations of their friends. The feature also works with just a single tap on any location on the map and you would be able to check restaurants in that area with their ratings and reviews.

Scan

Scanning is a unique feature on Snapchat where users can simply scan the product and get much-needed information about the same. For this, Snapchat has collaborated with big daddies in the market such as Amazon Camera Search, Dog Scanner, Photomath, Shazam, and PlantSnap.

Snap Originals

It is not just that Snapchat makes users use their filters and videos to share content with millions of users across the world. Through its magnificent feature called Snap Originals, the app allures amazing storytelling talents from every corner of the globe and encourages them to build their own content and create a few minutes long episodes.

Sponsored Lenses

Snapchat collaborates with some of the top tech giants and individual innovators to create mind-blowing features based on augmented reality. Using such sponsored lenses, users can create stupendous content that catches everybody’s eyeballs. The Sponsored Lenses can help creators build customized content for their own brand marketing.

Stories

One of the main features of Snapchat is the Stories as it has created a hallmark in the mobile app world. Almost all social media applications today don’t escape including this feature these days. The stories built on a profile shall remain on board for 24 hours before disappearing. Many marketing experts believe that Stories is the feature that shot Snapchat to its highest fame.

How does Snapchat make money?

snapchat business model board

So, how does Snapchat make money? A million-dollar question has a simple answer –through its uniqueness and most engaging features. Once the app is popular and finds its permanent place on users’ mobile phones, it is easy to build foolproof business strategies and provide value to users’ interests.

Snapchat business model exposed

Snapchat follows two main revenue-business models.

Self-created advertisements

In this Snapchat business model, the ads are created by businesses to reach the maximum number of customers worldwide. Such ads are made effective through the ad manager tool Snapchat. Enterprises have two choices to pay – first by paying 1000 impressions (CPM) or alternatively, the payment could be goal-oriented.

In addition, businesses can also pay per bid selected. Snapchat has kept the minimum bid value (USD 5/day). Depending on the nature of the business and target of reach, enterprises can select the most effective ad campaign on Snapchat. Snapchat offers keen monitoring of ad performance so that businesses can amend it if needed.

Direct ad purchase

Large-size enterprises would prefer to buy advertisements rather than develop and design them by using tools. Snapchat offers a straightforward way to purchase SnapAds and sponsored lenses so that the process is quickened and enterprises get what they want in a jiffy.

The video advertisement on Snapchat beings at USD 3000 a month; moreover, Snapchat lenses make hundreds of thousands of snaps every day and they come with various pricing models.

  • USD 450,000 a day (Sunday-Thursday)
  • USD 500,000 a day (Friday and Saturday)
  • USD 700,000 a day (holidays and special events)

Another way to get the advertisement is with the help of discovery ads wherein brand titles are showcased in the discovery section. Such campaigns start at USD 50000 a day.

How does Snapchat Spotlight make money?

Snapchat’s own answer to TikTok has been tremendously adopted by millions of users worldwide. Snap Spotlight is a new tab introduced in Snapchat mobile app that displays short-form video content or what they call Spotlight Snaps. It could be up to a minute long and it has a comment feature.

Snapchat, depending on the watch time, likes, shared, and bounce time decides to feature Spotlight across the applications that would reach millions of users worldwide. Since Spotlight, as the name suggests, keeps the users in limelight, more and more native Snapchat creative tools are used along with professional lenses sponsored by highly creative users. The revenues majorly come from the business models that involve making the best snaps driven by awesome creativity.

How to build an app like Snapchat?

Snapchat has proved that unique features and ease to enhance photos can add zeros to your business profits. Now that you are aware of Snapchat business models for revenue, here are the steps to build a Snapchat-like application by outsourcing your project.

Discovery phase

Though you are about to develop an app like Snapchat, it is still important that you study and research the market and users. Over the period, the demands and requirements of users and markets change, and therefore, it’s important that you pen down the features you require initially in your Snapchat-like app.

Design & development

Today, most of the budget is spent on UI/UX for the sole reason – an app should be easy to use and eye-catching enough to stay on the users’ mobile phones for a longer period. Even though you spend hundreds of thousands of dollars in developing an app like Snapchat, if the product fails to provide the best user experience through its user interface, it is not going to work because users shall simply uninstall the app. Today, users demand ease to use interface and therefore having experienced app designers will be beneficial as they will help to create user-friendly designs for mobile applications. Once the design and platforms are fixed upon, it is time to discuss and select app development technology stack because it is the backbone of any software production. Finally, you can fix the budget and ask them to develop the product.

Testing and deployment

After a successful design and development of the Snapchat-like app, the final stage is proper deployment and maintenance from there onwards. Most mobile app development companies offer a maintenance contract to overcome trivial issues and escalations. You may ask your tech partner about the same to assure that your product is up and running.

Technology stack for a Snapchat-like app development

Snapchat requires a king-size mobile app development and, therefore, hiring mobile app developers that are professional in their approach is required . You can get the best app development company on board to get on to the project. Assure the same as you build your own team and deploy a project manager to have a single point of contact.

It is also essential that you make sure that when you hire developers teams, they have hands-on experience to build an app like Snapchat. For this, they need to have expertise in the same domain plus a technology stack to develop a Snapchat-like app. Here is the list –

Language

  • Bootstrap, HTML, JavaScript, and React, for front-end development
  • Python for backend architecture
  • Objective C (iOS), Cocoa Touch, and PHP -for miscellaneous purposes

Hosting

  • Amazon Web Services (Route 53, CloudFront)
  • Google Compute Engine (for automatic scalability and enhancement)

Database

  • NoSQL (Not Only SQL) – for a larger volume of structured data handling

Snapchat clone app development – an easy way

As an entrepreneur, your ultimate goal, mostly, would be the best ROI and quicker revenue. While the cost to build a social media app like Snapchat may ask you to keep aside a significant amount, there is another way to build this product. Many mobile app development companies offer clone app development like Snapchat wherein the app that is already developed and stored in inventory is used. When you hire mobile app developers, they use the readymade codes and components available with them from previous successful projects. All in all, it is a win-win situation for both parties the development company and the buyer.

Why is it good to learn a Snapchat business revenue model?

All mobile applications would have monetization models if they are intended to be a product to serve in the market. If we wrap up the whole story, it is important to know the revenue business model of Snapchat because if you are an entrepreneur and want to have a startup that gets you the best ROI and guaranteed business profit, it is essential that you jump on the bandwagon that is already on the rage. In other words, Snapchat has proved its popularity and business model success; hence, you can learn Snapchat’s business strategy so that you can implement the same in your app business.

Snapchat business model FAQs

Snapchat business model refers to its revenue model which is how Snapchat earns money. There are several ways through which Snapchat assures an easy and great flow of income.

There are multiple ways through which Snapchat earns millions of dollars. Advertisements, direct sales of its products, and sponsored lenses are a few revenue models of Snapchat that makes it the best business online.

Of course; in fact, Snapchat business revenue model makes it sure that your business idea based on Snapchat strategies would assure you success. There are many businesses inspired by already-established business models to guarantee that the product and service would work. You can take help of business and technology consultants to build the same strategy and idea about your app.

If you are an entrepreneur and want to venture into a lucrative business, you can hire the best mobile app development company to go for customized Snapchat-like mobile app development that would be almost similar in functionalities and features.

Avantika Shergil Avantika Shergil   |  Dec 29, 2022

An enthusiastic Operations Manager at TopDevelopers.co, coordinating and managing the technical and functional areas. She is an adventure lover, passionate traveler, an admirer of nature, who believes that a cup of coffee is the prime source to feel rejuvenated. Researching and writing about technology keeps her boosted and enhances her professional journeying.

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