Snap Inc. (SNAP) who is no stranger to questionable content, is learning from the Youtube boycott and not taking any chances when it comes to their highly coveted advertisers who make up a significantly higher portion of total company revenues than Youtube does for Alphabet.

Youtube came under fire earlier in the year for a lack of control of their advertising, when big time brands' ads appeared on videos that featured hate speech and questionable content. A boycott ensued.

While Pepsico, Inc. (PEP), Dish Network Corp. (DISH), Starbucks Corp. (SBUX​), Wal-Mart Stores Inc. (WMT), and General Motors Co. (GM) all pulled their advertising from Youtube, it still only represented less than 1 percent of the Internet giant’s Alphabet Inc. (GOOGL​) revenues.  All in all, over 250 companies pulled their advertising from the video platform.

Snap has announced it is rolling out a targeted advertising platform to make sure that a Youtube incident does not happen. The company is allowing brands to buy advertising through a self-serve ad API, where companys can dictate what type of content their want to align themselves with by choosing where they want advertisements to appear. Brands will have the option to choose to have ads run only between regular users' stories, within stories, or shows produced by Snapchat and its media partners.

The move is intended to give Snap more control over where their advertising partners spots appear, which has become critical on user generated content platforms that generate the majority of revenues from advertising. 

Brands will now be able to exclude their ads from appearing in certain content categories, preventing the possible brand reputation risk of ads appearing next to controversial content.  Analyst Kip Paulson of Cantor Fitzgerald believes that this new feature makes Snap more advertiser friendly and will be incrementally positive for advertiser demand.

This good news comes at a critical time for Snap, which has suffered a precipitous decline after its highly anticipated IPO.  Shares are down nearly 41 percent since going public. Investors are hoping that Snap's stock performance will be similar to Facebook Inc.'s (FB), which, after experiencing a big decline shortly after going public, gained considerable momentum.

While Snap’s user growth has slowed significantly, existing users are spending more time on the app, a promising sign of engagement for potential advertisers.  With the new features, the company continues to show its innovation prowess, generating hope that the Snap will continue to be a leader in the industry. 

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