Here’s one way for Snap to grow its business without adding new users.
Snap has a plan to grow its young business: It wants to sell ads that appear inside other companies’ apps.
Snap, which owns Snapchat, announced what amounts to a mobile ad network on Thursday at the company’s first-ever partner summit in Los Angeles, its version of the much bigger developer conferences hosted by Facebook, Google, and Apple each year.
The ad platform, which is called the Snap Audience Network, is akin to Facebook’s Audience Network, which has been around since 2014. App developers that sign up for the program will fill their ad inventory with the same full-screen, vertical video ads that appear inside the Snapchat app. In exchange for selling these ads on behalf of the app developer, Snap will keep a portion of the ad revenue. Any company with a need for video ads but that doesn’t have a large sales team would be a prospective client.
Snap hopes advertisers will use the Snap Audience Network to reach a larger group of people than if they advertised on Snapchat alone — an important point considering Snapchat’s user base is no longer growing. If Snap can show the ads to more people, it should make Snap’s ad business more appealing to advertisers.
What’s unclear is how this will work in practice. Snap’s announcement on Thursday simply unveiled plans for the ad network, but it is not up and running yet. The company is asking for developers to submit applications to join the network before it launches later this year.
In a briefing Wednesday with reporters, numerous Snap execs talked about how they believe Snap’s Audience Network will offer users more privacy than traditional ad networks. The problem is that the company is not saying anything yet about what kind of data will be required to target people on apps that aren’t Snapchat.
Snap has made a point of saying that its developer partners do not get access to personal data from the people who use Snapchat, in conspicuous contrast to how Facebook’s developer policies have worked over the years. Only Snapchat display names are shared when someone links their Snapchat account with another app — but nothing else, like an email or phone number, Snap claims.
Targeted ads, especially when they appear on apps you don’t own, usually require some kind of personally identifiable information. 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. Again, the company is not sharing any details yet about how this will work or what will be collected in order to do that.
It’s also unclear if these ads will only appear to Snapchat users who use other apps, or if Snap can deliver them to non-Snapchat users as well. Executives hinted at the latter on Wednesday, claiming a major point of this effort is to expand the potential audience for Snap’s advertisers. How will it deliver targeted ads to people it knows nothing about? We’re not sure.
What we do know is that Snap is trying to take the next step to become a more established advertising business in the likeness of Facebook and Google. But announcing that plan is one thing; we’ll see if Snap can execute.
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