Snapchat Bolsters Lower Funnel Tools for Performance Marketers

Snapchat is shifting how advertisers buy ads on the platform, emphasizing immediate purchases that aim to deliver higher returns for brands.

Over the past six to nine months, the company has upgraded its lower funnel ad products and is venturing into political advertising, Snapchat revealed this week.

As part of its changes, Snapchat has redesigned and unified its ad formats, including a streamlined process that enables users to install apps within Snapchat in just two clicks, down from three, without redirecting to an app store.

Snapchat has reported a decrease in cost per install and an improved ROI for advertisers, per the company.

To guarantee purposeful clicks on ads by Snapchatters, the company is eliminating inadvertent clicks and introducing a delayed call-to-action button.

Snapchat is also introducing state-level targeting, in response to requests from ad buyers, enabling them to focus on specific states, including political ads for swing states, Senate races and down-ballot elections.

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For U.S. elections, Snap collaborates with the nonpartisan Poynter Institute to independently fact-check political ad statements, a spokesperson told ADWEEK.

Positioning itself as an antidote to traditional social media platforms, Snap reported a higher-than-anticipated Q1 revenue of nearly $1.2 billion, marking a 21% year-over-year increase. Additionally, the number of small and medium advertisers on the platform surged by 85% year-over-year in Q1, according to the company.

However, Darshan Kantak, Snap’s svp of revenue product, acknowledged the platform had faced challenges with direct response capabilities, exacerbated by Apple’s App Tracking Transparency (ATT) framework and Google’s decision to phase out third-party cookies.

“For performance advertisers, we know that ROI, ROAS or CPI is king,” said Patrick Harris, president of the Americas at Snap. “That’s why we’ve been putting so much energy into our lower funnel solutions. And at the end of the day, the improvements we’ve made are helping clients get more bang for their bucks.”

Snapchat’s recent changes also include adding generative AI-powered creative capabilities, enabling advertisers to alter backgrounds for existing product images and create dynamic ads on the fly, similar to tools launched by giants like Meta. These features are set to roll out soon.

Snap CEO Evan Spiegel acknowledged to Bloomberg that Snapchat has lagged in AI development, with plans to invest $1.5 billion annually to catch up.

Snap’s biggest strategic investment, per Kantak, is in its third iteration of Conversion API (CAPI), designed to combat signal loss by reducing integration time for advertisers to mere minutes.

CAPI allows advertisers to send data to Snap’s servers in real time, optimizing and measuring campaigns for a detailed view of ad performance. Advertisers who integrated Snap Pixel and CAPI saw a 22% increase in attributed purchases, a 25% improvement in purchase value, and an 18% improvement in cost per purchase.

Snap is also integrating CAPI with partners such as Snowflake, Tealium and Shopify to benefit their customers.

To that, Snap has introduced a four-tile ad format to enhance product showcases for brands. Previously, these products were displayed as thumbnails at the bottom of the screen.