Dive Brief:

• Snapchat is diversifying its ad products. The social media network has introduced a new ad-targeting offering called Snap Engagement Audiences that retargets users who’ve previously interacted with Snapchat ads, according to multiple reports. 
• Snapchat is also introducing goal-based bidding for app install ads or ads leading users to download outside apps. Marketing Land explains app marketers price their bids in Snapchat’s ad auction based on the value they place on nailing down an app install, and Snapchat targets the ads to users most likely to install the app. Snapchat leverages machine learning to target its app install ads, per Business Insider. 
• Snapchat charges app install ad buyers on a cost-per-thousand impressions scale, according to Adweek. The publication said the company is vying to draw app marketers with a wide range of advertising budgets. 

Dive Insight:

Snapchat, coming off an initial public offering and hungry for ad dollars, is making a bigger play for the app install ad segment that’s been formidable for Facebook, Twitter and Google, and promises to be a force going forward. Business Insider divulged app install ads accounted for 17% of Facebook’s ad windfall in 2015. As a whole, the publication projects app install ads becoming a $7 billion business by 2020, up from roughly $4.6 billion last year. Social media companies can command high prices for app install ads because, in the murky world of mobile, they provide a reasonably clear return on investment. 

Snapchat has the credentials to become a strong contender for app install ad revenue. It’s home to a Gen Z and millennial audience that app producers are anxious to cultivate, and it has the benefit of learning from a fairly mature app install ad market about pricing and targeting that works. John Hession, vice president of growth at Gametime, told Business Insider that results from app install ads on Snapchat were in line with rival platforms — Pinterest just rolled out app install ads — and that its cost-per-install rates were impressive. Pocket Gems informed Adweek it’s already planning to increase its spending on Snapchat app install ads due to high levels of engagement.

Snapchat’s targeting prowess will certainly make app install ads and its other ad packages more attractive, with marketers able to retarget users who have engaged with a branded lens and serve them future campaigns. 

Snapchat has bested Twitter to become advertisers’ second favorite social media network, but that doesn’t mean it doesn’t have ad challenges. It continues to trail Facebook, which is not hesitant to pilfer Snapchat’s features for its own gains, and has been criticized for its ads failing to yield fruitful ROI and engagement.