penalty box” for those prices (AdAge). As a result, Snap’s prices cratered. They reached a low point in June of 2018, when Snap Ads cost $2.95 per thousand impressions (CPM), compared to $4.20 on Instagram and about $5.12 on Facebook’s mobile app (AdAge).
This price drop was also fueled by Snap gradually phasing in its self-serve tools, which determine ad prices though programmatic bidding, the same process Facebook uses. This shift is a risky move because it allows advertisers to compare Snap’s auctions with Facebook’s directly, which are much more competitive.
Things may finally be looking up, though. In Q4 2018, Snap’s average ad price increased sequentially 3% over Q3, the first time that has happened since it introduced programmatic bidding. There are likely two reasons behind this increase. First, as chief business officer Jeremi Gorman told investors on the company’s fourth-quarter earnings call, Snap has seen a steady growth in active advertisers since it launched programmatic bidding in 2017. And second, Snap has recently added higher-value ads like the unskippable “Commercials” in Snap Originals.
This price drop was also fueled by Snap gradually phasing in its self-serve tools, which determine ad prices though programmatic bidding, the same process Facebook uses. This shift is a risky move because it allows advertisers to compare Snap’s auctions with Facebook’s directly, which are much more competitive.
Things may finally be looking up, though. In Q4 2018, Snap’s average ad price increased sequentially 3% over Q3, the first time that has happened since it introduced programmatic bidding. There are likely two reasons behind this increase. First, as chief business officer Jeremi Gorman told investors on the company’s fourth-quarter earnings call, Snap has seen a steady growth in active advertisers since it launched programmatic bidding in 2017. And second, Snap has recently added higher-value ads like the unskippable “Commercials” in Snap Originals.
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