Ahead of its upcoming IPO Snapchat is wanting all the monies after reports the company has been asking advertisers to commit to $100 – $200 million ad spends on the platform.
Snapchat is in talks with the media-buying arms of several big advertising companies, including WPP PLC, Omnicom Group Inc., Publicis Groupe SA, and Interpublic Group of Cos., and is seeking ad-spending commitments of $100 million to $200 million for 2017 from each firm.
Literally doubling or in some cases tripling what the firms currently spend.
WPP has spent $90million the platform just last year.
If companies do commit, the value of Snapchat would significantly boost its value which currently stands at $25 billion.
Snapchat ads do not cheap, with a single campaign and lenses running into six figures, although it is quite possible to buy some ads for under $50k.
While this sounds good for investors, a platform is only as good as its users and there are concerns that Snapchats advertising may affect user experience
“There is a natural evolution with every platform where they go from purely a hot cultural phenomenon and transform into a real functioning business,” said Mike Dossett, manager of digital strategy at agency RPA to CNBC. “They need to balance maintaining some of the magic of the platform.”