Christmas came early for digital marketers as Snapchat revealed it is ready to embrace behavioral targeting. The news sent ripples through the industry, as this could be a significant boost to the social media site and digital marketers.
The announcement was revealed by Business Insider, following the release of an eMarketer report on the company.
Snapchat’s director of revenue operations, Clement Xue made the announcement. The launch is expected during the third quarter of 2016.
Snapchat’s dense millennial demographic has been a highly sought after target by marketers, but the returns on investment have been mediocre by comparison to its competitors.
The burgeoning social media site only began allowing adverts in 2014, long after most of its competition.
Facebook, Twitter, and Instagram not only incorporated ads much sooner, but they’ve also long been in the behavioral targeting game, with Facebook, in particular, being the king.
Getting Behind Behavioural Targeting
What is behavioral targeting and why are advertisers excited about it?
Behavioral targeting follows a consumer’s every move on the internet, in order to provide content or ads unique to that individual.
Every site, every share, every product you googled or clicked on, the frequency of these operations and so much more, are carefully observed and turned into a tailored marketing apparatus.
If you have a Facebook account for example (who doesn’t?), then you’ve probably noticed ads on your stream from websites you visited.
Every time you show interest in a particular product, the internet wizards collect that data and unabashedly throw it in your face everywhere you go.
Benefits of Digital Marketing
The beauty of internet adverts is that you can reach consumers with only what they are interested in, no guesswork.
What snapchat currently offers is a generic targeting system, based on age, gender, location, operating system, mobile carrier, and content affinity. This still leaves room for misdirected ads.
Ads are then done based on general expectations – stereotypes. Not every teenage girl is interested in Justin Bieber’s greatest hits so that ad would be lost on many users.
This stale advertising methodology led many investors to lower their valuation of Snapchat. Yes, it’s a constantly growing platform, but it doesn’t do much for advertisers, which is where its revenue comes.
Snapchat got unfavorable news late last year when one of its primary investors, Fidelity, reduced its valuation of the company by 25 percent.
As of the middle of this year, Snapchat’s valuation had rebounded, and this new development will no doubt further improve it.
Giving advertisers what they want is precisely what is needed for marketers to flood snapchat. That’s not really what Snapchat is planning, however.
Creepy Ad Campaigns
Yes, Snapchat is open to behavioral targeting, but whatever happens, it must not be ‘creepy’.
Right from the launch of ads on the platform, CEO Evan Spiegel, and his team have been clear on the need for tasteful advertising.
Spiegel made his position known to advertisers that they don’t want their users’ pages to be loaded with overly-tailored ads that would make them feel uncomfortable.
Snapchat’s Privacy declaration makes it apparent that all ads should enhance a user’s experience, not dissuade it. All ads must be useful to the consumer.
As a result, Snapchat will only permit behavioral targeting within the application. What a user does outside Snapchat will remain “private business”.
This is not what advertisers want, as it will still severely hinder their effectiveness.
Facebook has fully embraced behavioral targeting, involving independent sites where customers can log in with their Facebook details. This makes everything a person does online available for advertisers on Facebook.
Facebook’s retargeting strategy is found distasteful by some users and sites, Snapchat included.
With Snapchat’s model, it will only work with users who are very active on the site and frequent or subscribe to the pages of businesses.
This is certainly an improvement on the ammo needed by advertisers, but is it enough?
Evolution of Snapchat Ads
In July, Snapchat began using advertising Application Programming Interface (API), which provides advertisers with enhanced analytical capabilities.
Through the API, advertisers can buy and manage their ad campaigns via third-party operators.
Many believe that Snapchat will continue to launch more sophisticated APIs as the year progresses.
There is reason to believe that even if Snapchat begins with its unique behavioral targeting model, it could loosen the reins as time goes by.
Marketing firms want to optimise their ads across different channels. What Snapchat has done is put a temporary wrinkle in their plans.
In the report, marketing technology company Amobee spoke about their API partnership with all the other major social media sites and 850,000 websites, and would like to extend that with Snapchat.
A synchronised behavioral targeting strategy would mean one ad per consumer across all platforms. With the limits on Snapchat, a different ad would have to be made based simply on a consumer’s Snapchat activities.
But that’s not Snapchat’s problem.
Snappers Over Marketers
User experience is still the priority.
Snapchat’s advertising policy certainly is right with its demographic. As a branding strategy, it differentiates itself from other platforms.
The convenience of customers has been placed above the company’s profit margin, and that is a very noble gesture.
It is uncertain how long the company can keep it up for, but that might depend on how convincing marketing firms are.
If the pitch can be made that despite the behavioral targeting model, Snappers won’t be overloaded with ads or feel stalked, a full launch could occur.
All Things Considered
41 percent of all 18-34-year-olds in America use Snapchat. The company expects its global users to grow by a minimum 30 percent over the next year.
Bottom-line, Snapchat will see growth in its advertising revenue, with or without behavioral targeting.
But thankfully, due to this strategy, many companies that have shunned Snapchat ads will come running.
It’s a great opportunity for the company. If it wants to be more competitive financially to Facebook and Instagram, this is one way to go.
Fortunately for snappers, they can rest assured that their beloved app won’t be overwhelmed by targeted ads anytime soon.