• by Erik Sass , Staff Writer @eriksass1, June 17, 2015

One of the big questions hanging over Snapchat is the issue of monetization, and specifically advertising, as it’s kind of hard to imagine any ad format appearing around user messages that wouldn’t be egregiously intrusive, given the inherent limitations of the medium. However the disappearing messaging platform may have struck on an ingenious solution, by offering users branded photo overlays -- for example virtual stickers and frames -- sponsored by contextually relevant brands.

Snapchat already offered users free geofilters based on user locations (there’s even one for LAX, for some reason) as well as special events, but up until now without brand mentions. Snapchat’s first sponsored “geofilter” deal is with McDonald’s, which is sponsoring a number of photo overlays thematically related to the fast food behemoth, including images of cheeseburgers and fries, among other things. It’s not hard to imagine similar deals for other brands: just think mouse ears at Disney Land, or a baseball and bat at Yankee Stadium.

The geofilters have the obvious advantage of becoming an organic part of the image shared by users, rather than a distinct message that interrupts the experience. Snapchat is also running shortish (10 second) video ads, which appear occasionally between blocks of content, but these leave the majority of its user-generated inventory unmonetized.

Last month Snapchat announced that it had raised an additional $537 million in new funding, which valued the company at $16 billion, prompting renewed scrutiny of its business model and potential profitability. The company claims to have 100 million users who watch two billion videos per day, suggesting it could be a serious rival to YouTube and Facebook.

Earlier this year Snapchat launched Discover, which gives media partners their own channel to feature content produced specifically for Snapchat’s audience. Publishing partners include National Geographic, Vice, Yahoo News, Comedy Central, Cosmopolitan, CNN, The Food Network and ESPN.