Snapchat is asking advertisers to shell out a minimum of $750,000 a day to advertise on its social platform, Garett Sloane at Adweek reports.
Many brands are balking at the price.
Snapchat believes its rates are completely fair given the unique audience it's able to offer--teens.
Teens are notoriously difficult for advertisers to reach and Snapchat's user base skews much younger than its competitors. The company is essentially providing a direct line to teenagers all over the world.
Despite this, Snapchat has limited reporting capabilities, so brands wouldn't be able to know what type of teens view their ads. Snapchat is unable to tell advertisers how men versus women saw an ad and there are no age breakouts.
On top of this, the ads themself disappear.
"It's very hard for marketers to get their hands around advertising that is so ephemeral," a source told Adweek.
Snapchat has reportedly been approaching top brands and "category leaders" about placement and a brave few have already signed on.
McDonald's recently ran an animated "Love Is Endless" commercial on Snapchat and the social platform's first ad partner, Universal, was so happy with their initial buy that they even chose to serve a second ad for Dumb and Dumber To.
It’s clear from its pricing structure alone that Snapchat is hoping to position itself against traditional television commercial buys. The video-heavy messaging app’s rates are somewhat in line with mainstream TV ad rates.
A 30-second spot on American Idol pulls in approximately $475,000, while a spot on NBC's "Sunday Night Football goes for about $627,300.
Snapchat’s ads, however, are generally less than 10 seconds long and reach a much smaller, though admittedly more targeted, audience.