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Snap’s New Ad Network: Opportunity in Programmatic Spreads to Social

Snap’s New Ad Network: Opportunity in Programmatic Spreads to Social

Snapchat is developing its own ad network to get a slice of the pie from its larger competitors like Facebook, LinkedIn and Google.

While the ad network — dubbed the Snap Audience Network — is not yet operational, it has created plenty of buzz since it was announced in early April.

The network “will exist beyond Snapchat’s own platform and allow marketers to target users across a variety of apps,” wrote Marty Swant at AdWeek. “The move is part of a broader push by the company to better scale its advertising business, which over the past two years has shifted from a primarily direct-sale model to one that’s primarily programmatic.”

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In other words, the announcement of the Audience Network is more than a new advertising channel. The Audience Network signals a shift in Snap’s ad business, bringing self-service (i.e. programmatic advertising) into the mix, using customer data in ways the company has shied away from in the past, and an expansion from its own user base.

The response to the announcement has been largely favorable — Snap stock rose 9 percent in the days following the presentation. But what else can the new ad network mean?

Snap Audience Network: New But Untested Opportunity for Brands, Apps and Snap

The new Audience Network is essentially a win/win/win scenario, provided it delivers.  

It’s a win for advertisers, with more targeted reach to a larger audience. It’s a win for app developers, with access to advertisers on a programmatic exchange. And it’s a win for Snap, with a brand spanking new source of revenue.

Source: Snapchat

According to Kurt Wagner at Vox, it’s a way for Snap to grow its business without adding new users to the flagship social platform — something Snapchat has struggled with recently. “Snap is trying to take the next step to become a more established advertising business,” writes Wagner. “But announcing that plan is one thing; we’ll see if Snap can execute.”

The main concern is that Snap will not be sharing personal or identifiable information in user data, leaving some to question how targeted, personalized ads will be possible with the ad network. “If Snap is not sharing data with its ad partners, those ad partners will have to share data back to Snap so it knows who it is targeting,” concludes Wagner. Suffice it to say details are sparse.

Sketching Out the Beginnings of an Ad Network

To kick off the effort, Snap has asked app developers to submit applications to become part of the ad network before it launches on iOS later this year and Android next year.

Once approved (and once the network is launched), developers will be given access to the company’s ad software developer kit, which will allow them to integrate ad monetization into their apps using the back-and-forth network.

Third-party apps will be able to fill their ad inventory with the same ad formats shown on Snapchat — the most promising of which are full-screen and vertical video.

But don’t expect the anticipated Audience Network to make much of a splash in 2019.

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According to an update from The Drum, Snap’s chief business officer, Jeremi Gorman, has said the company is taking the long view for the ad network. “We’re growing the list of partners deliberately,” said Gorman. “We don’t expect [Audience Network] to have a material impact on revenue in 2019 as we’re making this a very deliberate, long-term strategy for the business.”

In an industry defined by snappy ads and fast turnarounds on RFPs, Snap is banking on slow and steady winning the race here — or at least taking silver.