Snapchat is ready to make the big bucks with a slew of important updates to its ads offering. They’ll give advertisers the spotlight, buying flexibility, return on investment opportunities, and measurement to throw huge budgets at Snapchat’s 150 million daily users.
Snapchat’s Big Ads Announcements
- Snap Ads Between Stories – There will now be ads inserted when you auto-advance at the end of one person’s Stories to the next person.
- Expandable ads – Users can now swipe up on Snapchat’s ads to install a promoted app, watch a long-form video, visit a mobile website, or view an Instant Article-style article formatted specifically for Snapchat
- Ads API – Advertisers can now use programmatic interfaces to efficiently buy huge campaigns instead of having the manually strike deals with Snapchat
- All Ads Reviewed – Despite the influx of new ways and formats to buy, Snapchat plans to protect its user experience by reviewing all ads for quality before they run, and managing ad load so as not to overwhelm users with too much marketing
- Snapchat Partners For Ads – Snapchat will connect advertisers with a directory of ad tech developers building custom ad buying and management tools to help businesses spend more effectively using Snapchat’s few targeting options: age, gender, location, device/OS, carrier, and content affinity. Ad tech partners include 4C, Adeptly, Amobee, Brand Networks, SocialCode, TubeMogul, Unified, and VaynerMedia
- Snapchat Partners For Creative – Advertisers who don’t know how to build great custom Snapchat ads will be pointed to a directory of vetted creative agencies they can pay to help them produce eye-catching Snap ads. Creative Partners include Allay Everyday, Big Spaceship, Contented, Matte-Finish, Media Monks, Moment Studio, R29 Brand Lab, Studio Number One, Stun Creative, The 88, The Mill, Snapchat’s own creative agency Truffle Pig
- Snapchat Ad Measurement – Snapchat has slowly built a set of measurement partnerships into a robust offering including Moat, Nielsen mobile Digital Ad Ratings, and Google DoubleClick that will assist advertisers with figuring out which ads are working and worth spending more on
Together, these announcements turn Snapchat from a thriving social network experimenting with monetization into an advertising powerhouse.
Combining its cool, reach and depth of engagement with the tools for marketers to leverage the daily addiction of 150 million people could let Snapchat challenge Google, Facebook, TV, and everyone else for ad dollars. The launch of app install ads could be especially lucrative, as Snapchat is one of the most used apps in the world, while others struggle to get downloaded from the crowded stores.
The strategy is quite similar to what Facebook was doing circa 2011, building out an Ads API and platform of ad tech developers to unlock more spending on its revamped selection of ad formats. That strategy has gone well to say the least, with Facebook now earning $5.38 billion in revenue and $1.5 billion in profit in Q1 2016.
Snapchat earned $59 million in revenue in 2015 with plans to $250 million to $350 million in 2016, according to leaked documents reported by TechCrunch last month. Even with the $1.8 billion Series F it just raised, that seemed like a steep ramp up. But with today’s announcements, those revenue projections don’t seem as far fetched.
This is what Snapchat needed to open the doors to an IPO.