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Snapchat is tapping a brand new revenue source

June 16, 2015, 7:24 PM UTC
Snapchat Raising Money That Could Value Company At Up To $19 Billion
The Snapchat Inc. app is seen on an Apple Inc. iPhone 5s displayed for a photograph in Washington, D.C., U.S., on Wednesday, Feb. 18, 2015.
Photograph by Andrew Harrer — Bloomberg via Getty Images

Ephemeral messaging company Snapchat has found another source of revenue: location-based filters.

The Venice, Calif.-based company revealed to the Los Angeles Times Monday that it’s starting to monetize the colorful location-based filters it introduced about a year ago. Designed around location themes like a neighborhood or a corporate campus, the filters are sticker-like overlays that users can activate only when using the app in a particular location.

Now, Snapchat will let advertisers design their own branded filters for a fee. McDonalds is the first brand to participate — when users enter any McDonald’s location in the U.S., they can adorn their snaps with a double cheeseburger, a pouch of french fries, and other options.

Snapchat will initially work with big companies with large advertising budgets on the new ad product.


The company’s new revenue source is a twist on a proven favorite from other services: in-app stickers. Popular messaging apps in Asia, like Line, WeChat, and KakaoTalk, have been providing scores of fun and varied stickers for users to send to friends via chat, and San Francisco-based photo-sharing app Path also found success when it began to sell sticker packs to its users. But instead of charging users for the colorful add-ons, Snapchat, which now describes itself as a media company, is having advertisers foot the bill in exchange for the chance of reaching Snapchat users with their logos.

Snapchat now has more than 65 million daily active users, and filters decorate more than 1 million posts every day. It unveiled its first ads late last year. Earlier this year, the company launched Discover, a special section in its app that serves up bite-sized content from publishers like CNN and Vice.


Under pressure to monetize, social media companies have increasing looked for creative ways to connect advertisers with users in more meaningful and less intrusive ways, and Snapchat’s filters could prove a successful model. Snapchat has raised more than $1 billion in funding to date, and is valued at $15 billion.