Snap's Q2 2024 earnings report highlights significant progress in their direct response (DR) business, driven by investments in larger ML models, improved signals, and more performant ad formats. These efforts have led to a rapid increase in active advertisers on Snapchat, more than doubling year-over-year. Snap emphasizes the need for a comprehensive set of solutions that cater to the entire customer journey, from capturing to generating demand.
1. Demand Capture (DR)
Lead Generation
Snapchat has enhanced its Lead Gen suite, making it easier for businesses of all sizes to prospect for valuable audiences. Key improvements include:
- Integration with Zapier for automated lead reporting.
- Better signal usage for leads optimization.
- Improved reporting latency and ease of use.
These enhancements have resulted in:
- 69% reduction in cost-per-lead (CPL)
- 62% increase in lead form submission rate
- 21% increase in click-through-rate (CTR)
Improvements for App Advertisers
Snap has introduced new bidding capabilities for mobile gaming and expanded 7-0 optimization to support app install, app purchase, and app re-engage purchase capabilities. Gaming app clients, including Roblox, have seen a 30-50% improvement in ROAS.
Improvements for eCommerce and Web Advertisers
Snap is testing a Value Optimization offering for app advertisers, showing promising results. For instance, Lancôme saw a 38% increase in average purchase cart size and a 4.4x increase in ROAS. Web advertisers using Landing Page View optimization have seen:
- 34% increase in CPM efficiency
- 3.8x increase in platform conversions
- 212% higher ROAS
- 80% improvement in cost-per-outcome efficiency
- Nearly 50% reduction in bounce rates
2. Demand Generation (Brand)
Improved Takeover Products
Snap introduced new top-of-funnel takeover products:
- First Lens Unlimited: Offers unlimited impressions and frequency, driving a 25-45% increase in incremental impressions.
- State Targeted First Story: Allows US advertisers to target campaigns to individual states or the entire country with different creatives.
AR Advertising
AR continues to be a significant engagement tool on Snapchat. New AR Extensions expand AR advertising beyond the camera to all ad surfaces, including Dynamic Product Ads, Snap Ads, Collection Ads, Commercials, and Spotlight. Pairing AR ads with video ads results in:
- 1.6x higher Ad Awareness Lift
- 5x more active attention compared to industry peers.
3. ML and AI-Powered Creative Tools
Snap's ML and AI tools are enhancing Lens experiences and simplifying the creative process. The ML Scribble World Lens was viewed over 1 billion times in Q2. Advertisers can now create custom ML Lenses quickly using SnapML technology. The new GenAI Copy Generator helps create localized ad copy, streamlining the creative process.
Snapchat continues to focus on larger ML models, scaled signals, and performant ad formats, leveraging AR as a powerful tool for brand-oriented advertisers. With foundational elements in place, Snap aims to help advertising partners grow their businesses and optimize campaign performance across the funnel.
