Snapchat has worked smartly to make its disappearing messages attractive to brands. Now, it reportedly wants to take its relationship with advertisers to the next level. According to a Wall Street Journal report, Snapchat is hoping to secure deals in the $100 million to $200 million range from top agencies so that it can make itself a better buy once it becomes a publicly-traded company on Wall Street.
Some of the agencies in question, such as WPP, already report their yearly Snapchat spend at close to six figures, but the WSJ article says the messaging app is asking its agency partners to double or triple their commitments. Such deals aren’t unheard of for digital media platforms. One of the agencies Snapchat is talking to, Interpublic, previously smashed records when it signed a $250 million upfront deal with Google.
Snapchat’s advantages in its negotiations with agencies include its large user base of more than 150 million daily active users, popular ad formats like the interstitial spots that run between pieces of publisher-posted content, and the services of negotiators like former Viacom exec Jeff Lucas, who is comfortable targeting TV budgets. Its disadvantages, according to the Wall Street Journal, include its incomplete metrics and the fact that some advertisers reportedly question whether Snapchat is right for all types of branded content.
If it can secure these deals, Snapchat will likely please Wall Street. The platform is currently planning its initial public offering; should all go to plan, that IPO will land somewhere in the vicinity of $25 billion.