Snapchat is aiming to establish itself as a platform for creators to make a profit. The app recently announced its plan to introduce a mid-roll advertisement during Snap Stars (Snapchat’s biggest creators) stories. Creators will earn a share of the ad revenue using a payment formula, which weighs factors like posting frequency and audience engagement. The actual formula itself hasn’t been revealed and remains a mystery to the creators. Through Spotlight (Snapchat’s TikTok clone) the apps paid creators $250 million last year furthering the ongoing discussion among the creator community about revenue sharing models.
At the top of the conversation is TikTok’s parent company ByteDance who earns $58 billion in a year. In comparison to the company’s revenue, the creator fund is rather small at $200 million creator (even if it’s supposed to grow to $1 billion, but hasn’t yet). On the other hand, YouTube paid out $10 billion from ad revenue sharing over the last three years. However, one of the biggest problems for short-form platforms like TikTok and Spotlight is that these platforms would feel unusable if they had as many ads as YouTube.
With this new feature, Snapchat is trying to win over more content creators, but it’s hard to predict how it will play out while the payout formula remains unknown.
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