Ad Platform Update – August 2024

In Snap’s recent Q2 2024 earnings, we highlighted the ongoing progress made in our direct response (DR) business. Helping to drive this progress are the investments we continue to make across three foundational areas of our advertising platform: larger ML models, improved signals, and more performant ad formats.

In Q2, these areas of focus contributed to rapid growth in the total number of active advertisers on Snapchat, which more than doubled year-over-year, as we remain dedicated to driving performance for our advertising partners across the entire marketing funnel.

These days, it’s not enough to simply concentrate on either Direct Response or Brand Awareness – marketers need an expansive set of solutions which cater to the full range of the customer journey, both capturing and generating demand.

Our most recent product updates range from more expansive optimization choices that drive lower-funnel conversions to new brand-specific ad formats that achieve cost-effective reach. These new products and improvements offer partners compelling ways to reach the Snapchat audience, and we’re excited to share more details here about how savvy advertisers can take advantage of a ‘better together’ approach.

Section I: Demand Capture (DR)

Lead Generation

With numerous major and minor product enhancements to our Lead Gen suite, any size business can turn to Snapchat as a compelling destination to prospect for a unique and valuable audience. Recent notable improvements include an integration with Zapier to help automate leads reporting directly into CRMs, better signal usage to enhance our leads optimization, improvements to reporting latency, and overall ease of use. This progress has amounted to significant year-over-year gains, including:

• 69% reduction in cost-per-lead (CPL)

• 62% increase in lead form submission rate

• 21% increase in click-through-rate (CTR)¹

Improvements for App Advertisers

For app-based advertisers, we have invested in improvements across the entire stack and introduced new bidding capabilities designed for the mobile gaming category. We have now expanded 7-0 optimization to support app install, app purchase, and app re-engage purchase capabilities, and we recently began scaling these products with our advertising partners.

We are encouraged to see that a number of gaming app clients, including Roblox, are seeing a 30-50% improvement in ROAS on Snap.²

Improvements for eCommerce and Web Advertisers

We announced in May that we are testing a Value Optimization offering for app advertisers which allows marketers to bid on the basket value of purchases driven. Early test results are encouraging and indicate that mobile gaming and eCommerce advertisers in particular will benefit from the new optimization. For example, Lancôme, a beauty brand from L'Oréal, leveraged Value Optimization to drive a 38% increase in average purchase cart size and a 4.4x increase in ROAS.³

We are also seeing success from web advertisers who are leveraging our recently launched Landing Page View optimization to generate substantial improvements in site engagement and traffic quality. For example, Wrangler used Landing Page View bidding and saw a 34% increase in CPM efficiency. Landing Page View also helped drive a phenomenal 3.8x increase in platform conversions! Compared to previous benchmarks, this led to:

• 212% higher ROAS

• 80% improvement in cost-per-outcome efficiency

• Nearly 50% reduction in bounce rates⁴

Section II: Demand Generation (Brand)

Improved Takeover Products

We recently launched new top-of-funnel takeover products for advertisers: First Lens Unlimited and State-specific First Story.

For marketers leveraging Snap’s industry-leading augmented reality (AR) technology, First Lens Unlimited is an enhancement to our previous First Lens product. This new, high-impact AR takeover offers the first impression of the day in the first slot of the Lens Carousel plus unlimited impressions, frequency, and permanence in the next Lens Carousel ad slot for 24 hours. In testing, First Lens Unlimited has helped drive a 25% - 45% increase in incremental impressions for advertising partners.⁵ We’re excited to now offer it globally for all advertisers.

State-specific First Story allows US advertisers to target First Story takeover campaigns to individual states or to reach the entire country with different creative for each state, as selected by the advertiser. This expands on our previous First Story offering, which was only available to target an entire country with one ad creative.

AR Advertising

AR continues to help Snapchatters express themselves in creative and fun ways, and to build meaningful connections with their real friends. Snapchatters play with AR Lenses billions of times per day on average, and sponsored AR offers marketers the opportunity to create unique, innovative experiences that measurably lift their brand campaigns.

We recently announced AR Extensions for businesses, which extend our AR advertising products beyond the camera to all of our ad surfaces including Dynamic Product Ads, Snap Ads, Collection Ads, Commercials, and Spotlight.

Overall, we’ve found that when marketers pair AR ads with video ads on Snapchat, their campaigns see 1.6x higher Ad Awareness Lift on average compared to video ads alone.⁶ And research from our partners at OMD and Amplified Intelligence found that Snapchat campaigns that include AR in their mix drive 5x more active attention compared to industry peers.⁷

AR Extensions is now in beta and will be rolling out globally in September.

ML and AI-Powered Creative Tools

ML is helping us create more engaging and fun Lens experiences, such as our ML Scribble World Lens, which was viewed over 1 billion times in Q2. We announced at our NewFronts presentation that advertisers can create their own Lenses using this proprietary SnapML technology, and our AI-powered creative tools enable custom ML Lenses to be built in a matter of days.

Generative AI is also helping advertisers simplify and streamline the creative process. Marketers can now use our new GenAI Copy Generator to create headlines with AI, which is particularly helpful for brands looking to localize ad copy in non-English speaking markets.

As we move forward, we will continue to focus on larger ML models, scaled signals, and performant ad formats, while leveraging AR as a powerful tool for brand-oriented advertisers. With many of the foundational elements of our advertising platform now in place, we look forward to making continued progress in helping our advertising partners grow their businesses and optimize their campaigns for performance across the funnel.

Please see our Investor Letter for additional details on our business and stay tuned for future updates!