Snap Inc., Snapchat’s parent company, had the largest IPO since 2014, with a market evaluation of $24 billion. That being said, investors aren’t the only ones keeping a close eye on the platform—marketers are, too.

With over 158 million daily users, an average of 2.5 billion snaps sent per day, and users checking the app an average of 18 times per day (according to a report filed with the US Securities and Exchange Commission), it’s no surprise that marketers are considering Snapchat as part of their social media marketing strategy.

That being said, Snapchat isn’t for everyone and every brand. As with most advertising ventures, the success of your campaigns on a specific platform relies heavily on if that channel is one your target audience engages with consistently.

If you’re considering Snapchat marketing for your brand, how do you know if it’s the right allocation of your budget? While there is no ‘one-size-fits-all’ response to this question, there are certain points we can raise and facts to consider that can help shape your decision on whether or not to include Snapchat as part of your social media marketing.

How much does it cost to advertise on Snapchat?

Each advertising option on Snapchat is vastly different when it comes to cost. Various factors go into the pricing for each option, and total cost will vary for each campaign.

Traditional snapchat ads operate on a CPM (cost-per-impression) model, with a minimum spend of….drum roll please….$40,000 a month! Special ad units, such as sponsored geofilters, operate on a cost-per-swipe model, and are also a costly venture. The jaw dropping minimum monthly budget for ads and costs for special ad units are not kind to small businesses.

But– there is hope for those businesses out there that want results without risking a lot. For efforts with a smaller reach, setting a local geofilter (best for small companies, like a local coffee shop or small boutique) can cost as low as $5. These rates are calculated based on the size of the area you want the geofilter to appear in, as well as demand at that given time.

How does advertising on Snapchat compare to Instagram or Facebook?

Ultimately, Snapchat is a more expensive advertising platform than both Facebook and Instagram (and to put it in perspective, it costs more to advertise on Instagram than on Facebook).

Traditional ads on both Instagram and Facebook can operate on a cost-per-click model, with a minimum budget that is usually between $1-5 per day, depending on the ad type. Snapchat’s regular ad units are cost-per-impression. Inherently, Snapchat ads disappear after several seconds, which is aligned with organic posts on the platform. Ads on Facebook and Instagram are longer-lasting, however that’s the nature of those platforms.

What kinds of brands typically advertise on Snapchat?

Generally speaking, most of the brands we see advertise on Snapchat fall in the B2C space–whether it’s a publishing brand with lots of fresh content (Daily Mail, Refinery 29, etc.), or a company within the CPG (consumer product goods) space. In the example below, Mashable uses the Discover platform to serve users with regularly updated, newsworthy content.

Brands like Gatorade, Under Armour, Dominos, and plenty of other “super bowl” brands have experimented with the platform and found a lot of success with it. These brands tend to choose some of the advertising options that reach a wider audience, and are subsequently higher priced, because they have the budget to.

Ultimately, the most important thing to keep in mind is that the brands typically advertising on Snapchat are trying to reach a relatively young demographic, and are tailoring their content to fit those unique needs and interests. This brings us to the next point:

Who is on Snapchat?

71% of Snapchat users are under 34-years old, and 30% of US millennials use Snapchat on a regular basis. For brands trying to reach a young demographic, Snapchat is definitely an option to consider. For brands with a target audience skewed toward an older age range, other social media platforms may prove more effective.

Is Snapchat good for brand recognition?

When it comes to instilling brand recognition, Snapchat is definitely a capable platform. In a study produced by Milton Brown, data found that mobile purchase intent increased by two times when a company shows an ad on Snapchat, and 92% of campaigns have seen a positive sales after advertising on the channel.

What type of ad formats are available on Snapchat?

There are several different ad formats and categories available. All Snapchat ads begin with an up to 10-second video, and advertisers than have the option to select from 4 different interactive elements to continue engaging users.