Real Time Communications Featured Article

The Subtle Ad Lure of Geofilter Digital Stickers

June 24, 2015

Location-based services have typically made money through digital coupons for checking in at the local restaurant and tourist attractions.  Everyone loves a bargain and business owners love ways they can boost attendance and sales with unique offers.  Snapchat has found a new way to make location-based cash with geofilters, location-based digital stickers enabling the personalization of photos and videos.

McDonalds is the first company sponsoring a Snapchat geofilter, reports the Los Angeles Times.  Customers at any U.S. McD's can add a graphic of a double cheeseburger and fries, among other options, to a Snapchat photo taken on site.

With nearly 100 million daily users and a current use of over a million geofilter stickers a day, Snapchat believes  businesses will pay for geofilters to join its current portfolio of its own and user-submitted overlays.   Currently in beta, Snapchat is targeting geofilters with big ad budgets, including fast-food chains, theaters, and retailers.  The company will collaborate with businesses on geofilter design like it does with video ads.

Potential advertisers like the idea of geofilters because Snapchat is currently hot with teenage and young adult demographics, people with little debt and quick to spend.  Geofilters give businesses a subtle way to advertise in Snapchat's social media space, with results clearly measurable in where and when a particular geofilter has been used.  Users like the idea of sponsored geofilters because they are essentially opt-in, rather than being a Facebook or Google dished-up ad based upon previous pages visited and stalker-like IP address profile.  Sponsored stickers will be clearly marked with a small "Sponsored" imprint.

It's an open question if geofilters can be a big money maker for Snapchat. The company started running 10 second video ads in October, charging businesses $20 per 1,000 views , with ads appearing as a commercial break between other submitted content.  No word on how much geofilters are costing advertisers, but this is clearly a business where volume will make a difference.

Snapchat currently boasts it has several thousand geofilters, with half of them user-generated. A staff of 5 people works on geofilters, approving about a third of user submissions based on quality and formatting guidelines.

Longer term, geofilters could turn into a purchase opportunity for businesses.  Events, such as concerts, could be geofilter-linked to a website to purchase tickets for future shows and associated merchandise, for example.

Could other social media services use geofilters or offer a more broad digital stickers feature?  Any service with photos, such as Facebook or Instagram, could add in tools for adding in quick graphics of any sort, so people could jazz up photos with a location-based graphic. A "title" tag would be more customizable, enabling someone to click on an embedded link to go to a website for more information.

Such user-based opt-in style advertising on photos and video would expand the potential to make money for both users and businesses.  Users could get credits -- I would say frequent flier miles, but those are pretty much worthless these days -- that could be converted to cash or other rewards while businesses pay for results on the basis of click throughs or purchases. 

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