In the fourth quarter of last year, Snapchat faced a disappointing performance, with ad growth falling short of expectations and costs exceeding projections. This resulted in job cuts, funding reductions, and the shelving of various projects. However, in the first quarter of this year, Snap’s shares rebounded due to improved ad performance, refocused business opportunities, and a significant new emphasis on small and medium-sized businesses (SMBs). This strategy led to an 85% year-over-year increase in the number of SMB advertisers.

 

This week, Snap held a webinar featuring two key product leaders to discuss the company’s revamped ad system and its improved outcomes for all advertising partners. The 14-minute overview delves into each aspect in detail, but this post will cover the main points.

To begin with, Snap has redesigned its ad formats to create a more cohesive look and feel for promotions within the app.

“We’ve focused on creating formats that achieve the outcomes and objectives our partners seek. These redesigned formats help ensure that every action a Snapchatter takes on an ad is intentional.”

The new formats bring more consistency to Snap promotions, utilizing the full-screen display to highlight ad offers and messages.

Additionally, Snap is enhancing its AR ad options, introducing new methods for brands to increase exposure for their branded Lenses.

Snap is also expanding its “Total Takeover” product suite—which includes “First Story,” “First Commercial,” and “First Lens”—to feature a new “State-level First Story,” allowing targeted reach in specific regions.

 

Snapchat is preparing to introduce a more impactful AR product that provides advertisers with a full-day takeover of the Lens Carousel.

Additionally, Snap has introduced a streamlined app download process for app advertisers, allowing Snapchatters to install apps with fewer steps and without leaving the Snapchat platform.

Furthermore, Snap has implemented new bidding features tailored for mobile gaming advertisers.

 

Snap is currently experimenting with a Value Optimization feature, allowing advertisers to bid based on the value of purchases generated rather than solely focusing on the quantity of purchases.

Moreover, Snap has introduced a new bidding method for click-through conversions within a seven-day window, known as “7/0 delivery optimization.” This approach has resulted in reduced cost-per-purchase and higher Return on Ad Spend (ROAS) for initial participants.

Snap is also expanding its pool of partners to aid in campaign creation, including Customer Relationship Management (CRM) partners for enhanced data integration capabilities.

Through these new integrations, Snapchat can more accurately assess the usefulness of generated leads and track the outcomes of interactions, leading to enhanced optimization of its lead generation product and improved ROI for advertisers.

Snapchat has partnered with Snowflake, Datahash, LiveRamp, and Tealium to offer direct support for integrating its Conversions API. This collaboration enables businesses to gain deeper insights into the performance of their Snap ads.

Snapchat has also introduced a new optimization goal called Landing Page View, aimed at helping marketers achieve key performance indicators (KPIs) such as session volume, landing page views, and reduced bounce rates.

 

Snapchat has been consistently refining and enhancing its machine learning models to optimize for particular objectives. This effort has resulted in significant cost reductions of over 60% for certain advertisers compared to traditional click engagement models.

These developments offer valuable insights for your Snap ads approach, potentially shaping your strategy going forward. While many of these updates have been previously announced, they underscore the broader direction that Snapchat is taking with its ad products and its focus on driving enhanced performance.