Snapchat Lowered Its Ad Rates for Discover

Snapchat app on a mobile phone
Andrew Harrer | Bloomberg | Getty Images
Snapchat app on a mobile phone

Snapchat has settled on a price for ads that appear in its Discover section, and the new cost is much cheaper than what advertisers were paying just a few months back.

Snapchat's media head Nick Bell said Thursday at the NewFront presentation in New York that the company is now charging marketers two cents per view on ads that appear within the app's Discover tab. The news was first reported by AdAge and independently confirmed by Re/code.

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That translates to $20 for every thousand views. In early March, just a month after Discover first launched, Re/code reported that Snapchat was charging advertisers as much as $100 per thousand views.

Discover, which was launched in January, is a section of the app where users can watch videos or read stories from a dozen different publishers like CNN, Vice or ESPN. The ads within Discover run for 10 seconds and are sandwiched between bits of publisher content as users swipe within the section.

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Snapchat's lower ad price represents a relatively substantial decrease, but it's not altogether surprising. Snapchat wasn't selling out the ad inventory before — at least not regularly. Marketers were paying the higher prices as a way to test out the new format, but it's common for ad prices to settle once supply and demand is figured out.

That being said, Snapchat clearly wouldn't have lowered the price if advertisers were willing to pay the amount it was charging a few months back. Both publishers and Snapchat sell the ads, with revenue split different ways depending on who makes the sale.

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In April, Snapchat stopped selling its original ad unit, Brand Stories, although its seems likely those ads will return in some shape or form down the road.

By Kurt Wagner, Re/code.net.

CNBC's parent NBC Universal is an investor in Re/code's parent Revere Digital, and the companies have a content-sharing arrangement.