Snapchat Plans to Share Ad Revenue Through its Creators' Stories

Snapchat, which used to be a transient messaging application, is now attempting to establish itself as a profitable platform for creators. Snap recently stated that for Snap Stars (Snapchat's name for its famous creators), it wants to include mid-roll adverts during Snapchat stories.

According to a Snapchat spokesperson, the functionality is now in beta for a select group of creators based in the United States, but it will be rolled out to additional Snap Stars in the following months. Inside their stories, these commercials will display as mid-roll adverts, and the creator will receive a cut of the advertising revenue. A payment algorithm that weighs criteria like posting frequency and audience interaction determines the amount paid out. The nature of these payouts was not discussed further by Snapchat.

Snapchat paid $250 million to creators last year with just its TikTok clone Spotlight. In-app gifting and Snap's creator marketplace, which makes it easier for businesses to connect with AR developers and influencers, are also ways for creators to earn from Spotlight. The plan came about as the result of a long-running discourse among creators concerning the distinctions between revenue sharing and creator fund disbursements.

Hank Green, a long-time YouTuber and Vidcon co-founder, noted last month that TikTok's creator fund has not expanded at the same level as the network's user base, implying that TikTok creators are getting less for their efforts to the site as time goes on. Additionally, when TikTok's parent company ByteDance garners $58 billion in a year, a $200 million creator fund (even though it's expected to grow to $1 billion) appears to be a trifling amount in comparison.

In the meantime, during the last three years, YouTube has paid out $10 billion in ad income sharing. Short-form networks like TikTok and Snapchat Spotlight, on the other hand, would seem worthless if they had as many advertisements as YouTube.

Snapchat is seeking to mix both revenue sharing and creator funding strategies with this experiment. However, since the compensation formula remains a secret, it's difficult to say how beneficial this service will be for creators.