Snapchat has announced a significant shift in its advertising strategy by introducing ads to its main Chat tab. Until now, Snapchat’s Chat section had been a rare space in the app that remained free from advertisements. However, in an update revealed on Tuesday, users will now encounter “Sponsored Snaps” from advertisers alongside personal messages from friends. This marks a major development in the platform’s ongoing efforts to enhance its digital advertising presence.
Sponsored Snaps: A New Addition to Snapchat’s Messaging Experience
Snapchat’s decision to introduce Sponsored Snaps in the Chat tab reflects a growing need to expand its advertising offerings. According to the company, these Sponsored Snaps will be easily distinguishable from regular messages, ensuring users can tell the difference. Additionally, users will not receive any notifications about these ads, which will blend into their chat feed until viewed or ignored.
Snapchat has also implemented a time-sensitive feature for the new ad format: if a user chooses not to open a Sponsored Snap, it will automatically be removed from their inbox after a certain period. On the other hand, if a user does open the Sponsored Snap, they will have the option to interact with the ad by replying or clicking on a link to learn more about the product or service being promoted.
The launch of Sponsored Snaps is supported by Snapchat’s partnership with Disney as its first major advertiser, signalling that the company is seeking high-profile brands to engage users through this new feature.
Expanding the Snap Map: Introducing Promoted Places
Alongside Sponsored Snaps, Snapchat is also enhancing its Snap Map functionality with the introduction of “Promoted Places.” This new ad format allows users to discover various locations via their Snap Map interface, adding a layer of interaction for both users and businesses. Previously, local businesses could advertise through Snap Map, but Promoted Places opens the door for national brands to showcase their locations across different regions.
Initial launch partners for Promoted Places include household names such as McDonald’s and Taco Bell, which will now have the opportunity to engage with Snapchat users by promoting their locations within the app’s interactive map.
By focusing on national brands, Snapchat is positioning Promoted Places as a new way for major companies to reach users through geo-targeted advertising, offering a potentially more dynamic and location-specific form of promotion.
Why Ads Are Coming to Snapchat’s Chat Tab Now
This shift towards more advertising on Snapchat comes amid broader challenges in the company’s advertising business. Despite Snapchat’s continued growth, with over 850 million active users worldwide, its advertising performance has lagged behind key competitors. The company has struggled to grow its digital advertising business at a pace that matches the overall market, a concern that has directly impacted its stock market performance.
Snap CEO Evan Spiegel addressed these concerns in a recent memo to employees. “You may be wondering why, with all of the progress we’ve made in our business over the last year, our share price performance has lagged the overall market. The answer is simple: our advertising business is growing slower than our competitors,” Spiegel wrote. “The growth of our digital advertising business is one of the most important inputs to our long-term revenue potential, and investors are concerned that we aren’t growing faster.”
In an effort to close this gap, Snapchat is banking on these new advertising formats to provide fresh opportunities for brands and drive return on investment. Spiegel believes these new ad placements will help meet the goals of advertising partners by offering targeted, innovative solutions that capitalize on Snapchat’s unique insights into its user base.
What This Means for Snapchat Users
For Snapchat’s millions of users, the introduction of Sponsored Snaps and Promoted Places is likely to change their experience of the app. Previously, the Chat tab was seen as a private space reserved for personal conversations with friends, but the addition of ads may shift how users engage with the platform.
However, Snapchat is attempting to maintain user control by allowing Sponsored Snaps to be dismissed without viewing them, and making sure that Promoted Places doesn’t overwhelm the core functions of Snap Map. The company appears to be walking a fine line between enhancing its revenue streams and maintaining user satisfaction.
The Future of Snapchat’s Advertising Business
As Snapchat continues to evolve, the introduction of these new advertising formats could signal a turning point for the platform’s revenue growth. With an expanding user base but slow advertising growth, the pressure is on Snapchat to leverage its popularity in new ways to attract major brands and meet the expectations of its investors.
In the long run, the success of Sponsored Snaps and Promoted Places will likely depend on how well users respond to the new ad formats and how effectively brands can engage Snapchat’s young, digital-savvy audience. While the company is confident that this move will strengthen its advertising business, only time will tell if it can keep pace with competitors in the ever-changing world of digital marketing.
With Disney, McDonald’s, and Taco Bell as the first brands to try out these new features, Snapchat is betting that its refreshed advertising strategy will resonate with users and advertisers alike.
