No matter how young and cool its user base, Snap knows it needs better ad technology to win over Madison Avenue.
The “camera company” just bought Placed -- a location intelligence and ad-to-store attribution firm, which should give brands another reason to spend with Snap.
On its own, Placed says it was able to measure more than $500 million in media spend to store visits over the past year. “By partnering with Snap, we will do even more,” David Shim, Placed’s founder and CEO, stated Tuesday. Even as a Snap unit, Placed will continue to work “independently” with its hundreds of brand partners, he added.
Including stock payouts, Snap reportedly stands to pay upwards of $200 million for Placed.
The acquisition is not a surprise — the Snapchat parent had to do something. Last month, analysts blamed Snap’s less-than-stellar debut earnings report on its ad-tracking and measurement shortcomings.
“Investing in proving ad effectiveness is encouraging, but talk is cheap,” said Jessica Liu, senior analyst at Forrester. “Marketers are demanding that all digital marketing channels be held more accountable for everything from ad fraud to ad delivery transparency to better measurement.”
“Snapchat is not an exception to this rule and most social marketers already complain about Snapchat's lack of user data and proper social measurement,” Liu added. “It’s one thing to say on the earnings call they intend to do a better job of delivering metrics to prove ad effectiveness, but they have to execute.”
Over the past year, Snap has made efforts to smarten up its ad offerings.
For example, it recently launched an “Engagement Audiences” initiative, which invites brands to target those users who previously interacted with their ads on the app. Brands can now hit audiences that have already interacted with their Lens or Geofilter with a fresh Snap Ad campaign.
The point is to help advertisers reach consumers more likely to be in the “consideration stage” -- or “mid-funnel” -- because they have already shown an interest in their brand.
According to Snap, this sort of offering is not “retargeting,” as it is commonly known. Rather, it is engagement targeting all within Snapchat -- rather than involving outside Web sites or data.
Since its debut at the end of 2016, Snap also continues to roll out “goal-based bidding” for installs. Per the program, advertisers can “bid for installs,” which means buyers can optimize for the lowest cost per install by showing ads to users most likely to install the app.
This form of targeting is done via Snap’s auction, while brands are still billed on impressions.