How Do They Make Money?

Snap Inc's revenue is primarily driven by their flagship and namesake mobile app, Snapchat. The majority of it can be attributed to their 3rd-party advertising ecosystem, built on their platform.

These advertisements come in many forms, from full augmented-reality lenses to short-form vertical images and videos. The video and image -based ads integrate fairly seamlessly and do not frustrate the user. They offer their product or services with rich sound and rapid delivery, but do not obstruct one from tapping on the ad itself to get to more content. As a result, similar to TikTok or Instagram’s stories, you can quickly view multiple ads between your browsing of content. They also have an intriguing 4-square ad that lets the user tap on a product they find most compelling, like a multiple-choice quiz!

I’ve also noticed that they have their own built-in web browser so as to not redirect the user to Safari or other applications when clicking ads and shopping, this keeps the user engaged (similar to Discord on mobile). They also allow users to submit forms of text and contact information to provide the advertiser a direct line of communication with the Snapchatter.

That said, they have been trying to capture a premium market and improve margins through their Snapchat+ subscription offering, which gives the user a number of perks that would be percolating to its most avid users (who would already be the most likely ones to pay). These perks seem to encourage them to use the app more if they want to take advantage of their paid subscription. This bodes well for user retention and increasing usage!