Snapchat will sell ads in other brands' apps

In a challenge to Facebook and Instagram, Snapchat has launched Audience Network amid a swath of ad-friendly tools.

Landmarkers: Snap has launched new AR features amid a slew of product updates
Landmarkers: Snap has launched new AR features amid a slew of product updates

Snapchat will show its ads in other apps as a new way to increase revenue despite stalling user growth.

At its first press event in Los Angeles last night, Snap also announced the launch of a gaming platform and a slate of new shows for Snap Originals, its vertical video format.

The new Snapchat Ad Kit and Snapchat Audience Network will allow developers to serve Snap ads on their apps. This means brands will be able to buy ads from Snap that reach both Snapchat users and non-users in other apps.

Snapchat said it would split the ad revenue with app developers, but did not specify what the split would be. 

The platform’s user growth has stalled since late 2017, Campaign reported yesterday, with eMarketer attributing this to Snapchat’s decision to mix together Stories and chat. Snapchat disputed eMarketer's figures.

Hannah Gillett, strategy director at Spark Foundry UK, said Snapchat has struggled with a "leaky bucket" of users moving over to Instagram, its Facebook-owned rival. 

"The announcement of Snap Audience Network is another route to increase ad revenues, but will also demonstrate the ability to hit the kind of large scale audiences that advertisers have come to demand from social platforms," she said. "However, success will ultimately depend on Snapchat’s ability to build trust with developers and encourage them to sign up to be part of the network."

The launch of Snapchat Audience Network will be seen as a direct challenge to Facebook, which launched its ad network with the same name five years ago. In 2016, Instagram launched Stories, a similar format to Snapchat Stories. 

Snap Audience Network launched last night in the US on Apple’s iOS platform and will roll out on Google’s Android at a future date. Snapchat did not say when it would be available in other markets.

The gaming platform, Snap Games, will allow developers to create multiplayer games on Snapchat. Snap is launching the platform with its first original game, Bitmoji Party.

Snap Games will feature the non-skippable, six-second ads format that Snapchat launched in the third quarter of 2018. Brands can buy ads via Snapchat Ads Manager and there are plans to extend monetisation offerings in the future.

The company also announced updates to the app’s augmented-reality features, such as Landmarkers, which allows you to place 2D and 3D content on real-world locations, such as the Eiffel Tower or Buckingham Palace.

Snapchat is also releasing a slate of AR features to the public in Lens Studio, which enables brands and creative agencies to build their own Snapchat content. These features include hand, body and pet tracking.

Jim Cridlin, global head of innovation at Mindshare, said Snap's innovation is likely to be welcomed by brands if it leads to greater scale.

But, he warned: "Innovation is a treadmill. Snap has a history of innovating but then losing that differentiation as competitors ‘fast adapt’ to Snap’s latest. Many of the enhancements Snap has announced may be quickly replicated on other platforms."

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