Snapchat is adding some creator monetization tools as it looks to ramp up its engagement efforts, and keep pace with rising popularity of TikTok among younger audiences.

First off, as it looks to re-align its payment program for its TikTok-like feed, Spotlight, Snapchat's launching new 'Spotlight Challenges', which will get cash prizes to users posting best videos on a specific theme.
the new Spotlight Challenges will detail what each trend means, as well as what's up for grabs for the best clips in each category.

Snapchat explains:

Spotlight Challenges will be live on the Trending Page, which can be reached via the trending up symbol in the top right corner of Spotlight in Snapchat. Choose a Challenge you'd like to participate in to view that specific Challenge's page, which will be home to the Challenge description and submissions from the community. Tap "Challenge Details" to see contest-specific information such as prizes available and entry deadlines. Tap the camera icon to open the Snapchat camera. Create and submit!

It's an easy process, and it could give Snapchat a way to feed growing content trends, which is one of the key ways that users engage on TikTok. It also may give the app a new revenue stream, with brands eventually able to sponsor specific Spotlight trends relative to their promotions.

To be sure, Snapchat has not stated anything about the introduction of Sponsored trends, but it would make sense, at least for the app.

"The combined prize value for individual Spotlight Challenges will generally fall between $1k and $25k, though sometimes we'll open up a higher amount for a specific Challenge, and the minimum prize that a Snapchatter can receive in a Spotlight Challenge is $250."

The alternative prize pool could also serve as a means through which Snapchat restructures its existing Spotlight payment program. While this spotlight payment program has, to an extent, worked well, it has also had problems associated with it.
At launch, last November, Snapchat announced that it would pay out $1 million per day in the form of sharing the largest-grossing Spotlight clips, to encourage engagement and get the product out the door. Which worked – by the end of Q1, Spotlight had leapt to 125 million monthly active users (out of Snapchat's 280m total actives), but by that stage, Snap had already paid out $90 million in creator payments, with more to come, and the cost-to-benefit ratio was starting to look a little out of whack.
In the final analysis, Snap might have been better off paying 125 thousand people $1k each to simply click on and view Spotlight content each day throughout the year, for that may well have ended up being both cheaper and more effective.

Settled questions aside, with the expenses piling up, in June, Snap announced an update to its Spotlight payment process, switching from daily payments of $1 million for Spotlight clips to a more nebulous 'millions per month'.

This has caused all sorts of headaches for the creators who had already complained about delayed payments and other problems with the program. And since some were earning tens of thousands per month through Spotlight, sometimes more, this left many feeling jilted, and it has ended up souring some of Snap's creator partnerships in its wake, exactly the opposite of the intended impact of the process.

Maybe, therefore, this would be a more rational, and sustainable way to fund clips under Spotlight, which might also encourage more varied creation within the program, rather than just the strongest creators taking the lion's share of funding.

It is funded from the current 'millions per month' in overall payments for Spotlight, so won't add to costs, but it could, potentially, offer a range of new choices for Spotlight.

It's an interesting experiment to boost potential engagement with the option-though again, it'll do little to ease the pain of those Spotlight creators already seeing their payment amounts decline over time.

According to Snapchat, Spotlight Challenges is rolling out next month for Snapchatters on both Android and iOS within the US, but further markets will be available in subsequent months.
Snapchat is also expanding virtual gifting option to all 'Snap Stars' around the world.
Snapchat announced in May its virtual gifting process, which was initially restricted to verified Snap creators to receive digital gifts, like the one above, purchased by users through the platform with tokens.
When you send a Gift to a Creator, your Story Reply gets prioritized in their feed! You will be able to see when a Creator has opened your Gift, and they can reply back 1:1 or share your reply to their Public Story!
For the majority of the purchase amount, these digital stickers revert back to creator, serving as another direct stream of revenue for snap stars for their work and also in building connection with their audience within the app.

More Snap Stars will now qualify for the program, though what specific qualifiers entitle one to gain a verified creator account - and, of course, receive gifts in the app - is not completely clear.

The current qualifiers to get a Snap Creator account are:

100 Subscribers
Account Active for one week
At Least 1 bi-directional friend
But this is only the beginning; to qualify for in-app rewards, one must have an account which is now titled a 'Snap Star', the next level of creator account.

According to Snap:

Here's the quote: "We consider many factors determining the eligibility of an account to upgrade to a Snap Star (also known as a verified Creator Account). These factors include, but are not limited to, compliance with our Terms of Use and Community Guidelines, account engagement and growth, account use for public consumption, authenticity, notability and cultural relevance and content quality.

As with most social verification programs, all these measures are pretty opaque and have no prescriptive qualifiers, as such, for each element. But for those who qualify, it will provide another monetization option, which could help Snap keep its top stars posting and engaging more often.

Snap's also revamping its Creator Marketplace influencer/brand connection platform, with companies now able to connect with Snap Stars in the app "to help elevate their marketing presence on the platform".
The feature was originally launched back in May, only allowing connection with Lens Creators, Lens Developers and Lens Partners. However, Snapchat is now extending that to include verified creators, offering yet another route for brands to connect with influencers who have already established their followings within the app for a promo campaign.

Going alongside that, Snap is also introducing the new 'sponsored by' tag, whereby Snap Stars will be able to tag a brand in their sponsored content.

And finally, Snapchat's also launching a new Creator Hub which is going to provide a range of Snapchat tips and tools to help improve your knowledge of the platform and your output
All aspects of the platform will be given overviews through the service, and this would help both the creators and marketers.

Some interesting updates from Snap as they work in conjunction with the rising 'creator economy' push, as each app works to provide more monetization potential as they work to retain the best, more engaging talent.

Because, in the end, it is talent that wins. TikTok probably does its best at democratizing the approach to content through hashtag trends and remixes, but the YouTube, Facebook, and Twitter -- it's those big stars that get users coming back to their content every day.

Eventually, the hope of every app that isn't TikTok will be that TikTok can't build an equitable monetization framework, which will send its stars elsewhere (as happened to Vine). But over time, as TikTok continues to advance its eCommerce tools in particular, that looks less and less likely. Which then pits every app in a race to maximize creator funding, and Snapchat, too, is clearly looking to maximize its potential with new tools and experiments like these.