This is how Snapchat plans on making money

By Francis Bea June 25, 2013

Android-Snapchat-01 — Image used with permission by copyright holder

Snapchat finally has a monetization strategy. On the heels of a $60 million investment, we’re speculating that investors want to see a return (and so do the founders), and thus Snapchat’s CEO Evan Spiegel has revealed to TechCrunch that the app will make money through in-app purchases.

“In-app transactions will come first,” says Spiegel. “We think we can build really cool stuff people want to pay for. The app is now a part of everyone’s day-to-day lives. That means that they will — I at least would — pay for a more unique experience.”

Surprisingly, there isn’t any indication about what Snapchat has planned with brands. If social apps have learned anything, it’s that the big money comes from the brands and advertisers. But while sticky, Snapchat isn’t like other apps. There’s no dashboard, and the content – due to its self destructing nature – doesn’t actually stay on Snapchat for longer than 10 seconds (though, we’ve learned it will stay on your phone a lot longer).

So with in-app transactions the first business model on Snapchat’s plate, it’s easy to guess that Snapchat might offer stickers – which are popular these days – additional brush colors, and perhaps even filters.

What TechCrunch notes that Snapchat may already be experimenting is native advertising. Since Snapchat offers self-destructing photos and videos, native ads would look just like any other self-destructing photos and videos but with one exception. This style of 10 second content would be promoting something. Brands are slowly experimenting with Snapchat, and it’s reasonable to believe the app might try and offer them unique options within the platform to reach users.

In another move, if native advertising is on Snapchat’s mind, the company could even decide to control content reach, meaning that businesses would have to pay to reach a certain number of users.

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