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Snapchat’s secret to video ads is deceptively simple

May 26, 2015, 2:33 PM UTC
Snapchat Raising Money That Could Value Company At Up To $19 Billion
The Snapchat Inc. logo is displayed for a photograph on an Apple Inc. iPhone 5s and laptop computer in Washington, D.C., U.S., on Wednesday, Feb. 18, 2015. Snapchat Inc. is raising money that could value the company at as much as $19 billion.
Photograph by Bloomberg via Getty Images

Snapchat CEO Evan Spiegel has a simple plan to turn his company into a money-making machine: video ads.

And not just any video ads. A Bloomberg profile on the mercurial executive reveals the secret to Snapchat’s success is to play advertisements in portrait mode so smartphone users don’t have to flip their screen to view them. Snapchat tells potential investors its users are nine times more likely to view ads displayed in this format, Bloomberg reports.

Snapcaht, which inserts its advertisements into various media channels—11 media brands, such as CNN, ESPN, and People magazine have signed up so far—as well as other “stories” on the service, claims over 60% of smartphone users age 13 to 34 are watching more than 2 billion videos each day in total, nearly half as many as competitor Facebook, which boasts 10 times as many users.

However, despite Snapchat’s success, it’s not all easy going for Spiegal. Bloomberg notes the company has cut its ad rates significantly, down from $100 per 1,000 views to just $20.