Snap had a rough couple of days last week after CEO Evan Speigel filed an 8-K with the Securities and Exchange Commission (SEC), warning that his company would miss its predicted Q2 revenue and adjusted earnings.
The company’s shares plunged 39% the next morning, causing a downward ripple effect on the value of advertising-dependent platforms and ad-tech companies such as Meta, Roku, Pinterest, Google, Twitter, Trade Desk, Magnite and PubMatic.
While Snap’s valuation was undoubtedly high, the news still spooked advertisers linked to the social media platform Snapchat.
However, Snap is pushing forward with a new ad product focused on an industry that has seen its own fair share of recent turmoil: travel.
Snap is targeting hotels, airlines, tours, and online travel agencies in today’s launch of Dynamic Travel Ads. This is the first category expansion outside of ecommerce within the company’s current Dynamic Ads offering, which enables partners to seamlessly create a variety of ads based on their catalog, as the Snap system automatically serves the most relevant ads to specific Snapchatters.
With the COVID-19 lockdowns, stay-at-home orders, and travel restrictions, the travel industry has experienced a multiyear crisis. According to the World Tourism Organization, international tourist arrivals declined globally by 73% in 2020, with 1 billion fewer travelers compared to the previous year, putting between 100 and 120 million direct tourism jobs in jeopardy.
But Snapchatters are ready to travel. According to Snap, 76% of its U.S. users are making plans to travel or have already returned to their pre-pandemic travel routines. Based on a GlobalWebIndex study, Snapchatters are even more likely to travel than users of other platforms.
Snap also says that because Snapchatters are 37% more likely to book travel after seeing an advertisement, the platform wants to help advertisers use Dynamic Travel Ads to reach key audiences.
The new expansion builds on Snap’s hearty Location features, including the data of Snapchatter visits to over 30 million unique places across the globe, the Snap Map, with reaches over 200 million users every month, and 49 million new Map locations featuring Stories, hours, reviews, and delivery options for local businesses.
Dynamic Travel Ads launched in beta last year, which Snap says took “strong performance with Snap Ads and other products” to “new levels.”
Booking.com, for instance, used Dynamic Travel Ads to pull images directly from its product catalog and serve users ads with locally relevant listings based on products they had already viewed. The company saw a resulting 30% lower cost per purchase than other U.S .advertisers, according to internal data.
"By using Snapchat Dynamic Ads, we were able to maximize relevance by matching customers to specific destinations, dramatically improving performance metrics across the booking funnel in the process,” says Phil Dodwell, marketing media lead of Etihad Airways.
Snap says Etihad reduced its cost per flight search by 4 times and saw a 307% increase in ROAs, along with a 76% decrease in cost per purchases compared to its non-dynamic campaigns.
Snap is improving its offerings for all Dynamic Ads clients as well via a “location-aware” catalog, which allows advertisers to include a latitude/longitude in their catalogs so their message or offer can be tailored to wherever their customer is in the world.
When asked if Snapchat was on its way out the door, Mark DiMassimo, founder and creative chief of the agency DiGo, wrote in an email to me that “Snapchat is here to stay!”
He added that “Temporary macro headwinds aren’t about long-term viability. Snapchat is core to users messaging and has a great innovation pipeline that advertisers and merchants will increasingly use.”
Along with Snap’s leading augmented reality technologies, Dynamic Travel Ads are a prime example of said innovation pipeline.