As previously reported, Snapchat has been looking for ways to make Stories more relevant since noticing a recent trend of customers spending more time viewing content on its TikTok rival, Spotlight. Although Snapchat already has commercials on its Discover tab, this will be the first time the mobile messaging service splits ad revenue with artists.
Snapchat is attempting to establish itself as a revenue-generating platform for creators. On Monday, February 14, the company revealed that mid-roll commercials for its verified creators would be introduced during Snapchat stories. When tapping through Stories for the first time on Snapchat for iOS, users will now see mid-roll advertisements.
Reports are that this feature is currently in very early testing for a select group of US-based creators. Still, creators who have reached Snap Star status, denoted on their account by a gold star certification, will be able to use it in the coming months.
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These commercials will display as mid-roll ads within their stories, with these creators receiving a portion of the ad income. When determining the compensation, a payment algorithm analyzes elements such as posting frequency and audience interaction. Snapchat has been tight-lipped about the payouts. The feature will be rolled out more widely later this year.
This disclosure comes after news sites revealed that Snapchat lost $3 million in income last year due to Apple’s ad restrictions. Snapchat is experimenting with this functionality to determine if combining the approaches of creator funding and revenue sharing can be viable.
This test aims to settle a long-running argument among creators about the differences between creator fund payouts and revenue-sharing plans. Some creators believe that apps like Tiktok and Snapchat don’t let them generate much money from advertisements while making significant contributions to the services. This test will likely indicate if Snapchat can operate this function because its nature prevents it from running numerous advertisements.