Snapchat goes after retailers and DTC brands with new Dynamic Ads

Snap today is announcing a new kind of advertising product, Dynamic Ads, that will help it to better attract ad dollars from retail, e-commerce, and other direct-to-consumer brands - a group that today thrives on Instagram. With Dynamic Ads, advertisers can now automatically create ads in real-time based on extensive product catalogs that may contain hundreds of thousands of products. These ads are then served to Snapchat users based on their interests using a variety of templates provided by Snap.

These templates have been designed for mobile, Snap says, and will help the advertiser save time as they won't have to manually create their ads. Instead, they just sync their product catalog and allow Snap's system to build the ad in real-time. As product availability or prices change, the ads will also adjust.

The move to better serve advertisers in the retail and direct-to-consumer (DTC) space comes at a time when many DTC brands have been increasingly turning to Snapchat as Instagram has grown too crowded. Advertisers have complained about saturation and higher ad prices there. Snap, meanwhile, targeted this category of advertisers with a growing number of tools. The result, according to some DTC brands were ads that were 8 times cheaper than Instagram.

The Dynamic Ads are the latest in a long line of new ad products and tools. Since Snap launched its Ads Manager two years ago, it has rolled out new ad types, integrations, buying types, and more, including Snap Pixel, Product Ads, advanced optimization, reach & frequency buying, quick Instant Create ads, Shopify integrations, and others aimed at video marketers. like the premium Snap Select program, the non-skip, six-second video Commercials.

More recently, it's been focused on making ad creation easier. In July, Snap launched an "instant" tool called Instant Create that would help advertisers who were not used to creating ads for the smartphone-friendly vertical format. This ad tool would generate an ad from a brand's existing assets, like an e-commerce storefront, in just three steps.

The new Dynamic Ads will be even simpler, in a way, as advertisers will be able to build "always-on" campaigns that don't need constant updating.

That being said, the ads risk being a little more generic. Once these templated ads spread across Snapchat, it may be harder for the products being sold to stand out from others. After all, Instagram DTC ads often succeed because of the creative ad collateral involved, or the storytelling, which goes beyond just showcasing product photos. Instagram also allows brands to connect with a wide variety of influencers to promote the products.

Snap has clearly thought about this issue, though, as its Dynamic Ads can use the same product image across five different template styles.

Snapchat believes it can do well in this space, because it can better deliver the millennial audience. The company claims that 38% of Snapchat users 16 and up can't be reached on Instagram daily, followed by 49% on Facebook. Snapchat, meanwhile, reaches over 90% of 13 to 24-year olds in the U.S. And its user base is highly engaged with the app, which gives advertisers more opportunity to reach them.

"Snapchat has become a go-to destination to reach the largest and most economically influential generations in history, Millennials and Gen Z. Snapchat Dynamic Ads now allow brands to create real-time optimized mobile ads quickly and at scale, with products showcased in visually-appealing templates that feel native to the app," said Snap's Kathleen Gambarelli, Group Product Marketing Manager, Direct Response, in a statement.

"More than 75% of the 13-34-year-old U.S. population is active on Snapchat, and daily Snapchat users open the app over 20 times each day, offering brands major opportunities to reach the right person with the right message at the right time," she added.

Interested advertisers will be able to start setting up their campaigns today in an open beta test, and these will begin running in one or two weeks' time. Dynamic Ads will be available worldwide for all Snapchat advertisers, but campaigns will only reach U.S. users to start. Snap says global markets will begin in the coming months.

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