Snap Inc. (SNAP) is taking on Facebook Inc. (FB) on in an area it dominates: mobile ads, rolling out the ability for advertisers to target ads at Snapchat users that are most likely to download their apps.
According to a report in Business Insider, the new advertising tool, which uses goal-based bidding, as it is known in the world of mobile advertising, is a direct attack on Facebook. Snap said it is using machine learning technology it developed to enable targeted ads aimed to get users to install apps. “We've been listening closely to direct-response advertisers and are excited to announce the ability to 'bid for installs' in our auction," Peter Sellis, the director of monetization product at Snap Inc. said in a statement to Business Insider. “This is a new, cost-efficient way to drive app installs right from Snapchat."
The Installation Plan
According to BI Intelligence the app install ads market is expected to hit $7 billion at the end of 2020 and is an important area for Facebook. Business Insider said app install ads represented 17% of Facebooks ad revenue in 2015. With mobile apps proliferating at breakneck speed, advertisers and social media networks are looking for ways to stand out from the pack. Since the ads are targeted at users who are likely to install the app, they are more valuable to advertisers. Much of the app discovery, and thus the downloading, happens because of social media platforms, presenting a big opportunity for Snap and Facebook. In addition to goal-based bidding, Snapchat is also enhancing its ad targeting features enabling advertisers for the first time to target Snapchat users that interacted with past ads that ran in the app. (See also: Google and Facebook Run 57% of All Digital Advertising Worldwide.)
Both moves come at a time when the likes of Facebook, Twitter Inc. (TWTR) and Alphabet Inc.’s Google (GOOG) have been reeling from a backlash by advertisers who are fed up with their ads being placed alongside questionable content. Last month, Martin Sorrell, CEO of advertising giant WPP Group, argued the social media giants have to control where the advertisements are placed as well as clamp down on fake news or risk losing advertisers. Last month several prominent businesses and clients for Google’s advertising solutions pulled ads off its site when the company could not reassure them that their ads would not be placed against content that was inappropriate. Google has responded by revamping its advertising policies.