• by Colin Kirkland , October 8, 2024

In order to accelerate the growth of its ad business, Snapchat is introducing ads into the app’s Chat tab for the first time.

Soon, Snap plans to begin testing 'Sponsored Snaps' with Disney in users' personal inboxes

Sponsored Snaps are designed to deliver an interactive full-screen vertical video Snap directly to Snapchatters within their chat inbox.

Users can opt in to opening the Snap and can reply by sending a message to the advertisers, Snap says, or can use the call-to-action to open a predetermined link, the company says.

This ad type is intended to be distinct from other Snaps in a user’s inbox and are not delivered with a push notification. If it is not viewed, they will be automatically removed from the inbox.

Snap CEO Evan Spiegel first announced the company’s plans to introduce Sponsored Snaps and Promoted Places -- a Snap Map feature the company will soon begin testing with McDonald's and Taco Bell -- early last month, highlighting Snap’s focus on growing the number of advertisers focused on lower-funnel goals.

In September, Spiegel said the company hopes these new advertising placements will help the company meet the goals of its ad partners by utilizing the app’s insights to drive return on investment across the platform.

“You may be wondering why, with all of the progress we’ve made in our business over the last year, our share price performance has lagged the overall market,” Spiegel added. “The answer is simple: our advertising business is growing slower than our competitors. The growth of our digital advertising business is one of the most important inputs to our long term revenue potential, and investors are concerned that we aren’t growing faster.”

If Snap’s ad business wasn’t lacking it’s likely the company would have left its chat feature -- one of the most popular spaces among the app’s 850 million users – untouched by sponsored placements. 

But the move aligns with the company’s goals of its redesigned ad business, concerned with attracting more SMBs to its platform, which due to the launch of Snap’s Conversions API (CAPIO) has so far been successful.

So far, Snap has seen a massive boost in SMB advertisers, as well as improved advertiser ROI.

According to the company, its Direct Response (DR) business grew 16% year-over-year, with total active advertisers doubling year-over-year in Q2.