Snapchat’s Q2 2024 Update: Enhancements in Ad Performance and New Features
In Snap’s recent Q2 2024 earnings report, the company spotlighted significant advancements in its direct response (DR) advertising business. The progress is driven by ongoing investments in three core areas: larger machine learning (ML) models, improved signals, and more effective ad formats. These enhancements have contributed to a remarkable increase in the number of active advertisers on Snapchat, which has more than doubled year-over-year. Snap remains committed to delivering superior performance across the entire marketing funnel for its advertising partners.
Optimizing Direct Response: Key Improvements
Snapchat’s latest product updates emphasize refining both lead generation and app-based advertising. For lead generation, recent upgrades have made Snapchat a more compelling platform for businesses of all sizes. Notable improvements include integration with Zapier for automated CRM reporting, enhanced signal utilization for better lead optimization, and quicker reporting. These enhancements have resulted in impressive year-over-year gains: a 69% reduction in cost-per-lead (CPL), a 62% increase in lead form submission rate, and a 21% increase in click-through rate (CTR).
For app advertisers, particularly in the gaming sector, Snap has introduced new bidding capabilities tailored for mobile games. The expansion of 7-0 optimization now supports app installs, purchases, and re-engagements. This development has led to a 30-50% improvement in return on ad spend (ROAS) for clients like Roblox. Additionally, Snap is testing a Value Optimization feature for app advertisers that allows bidding based on basket value, which has shown promising results. For instance, Lancôme used this feature to achieve a 38% increase in average purchase cart size and a 4.4x ROAS increase.
Web advertisers are also seeing benefits from Snap’s new Landing Page View optimization. Wrangler, for example, saw a 34% increase in CPM efficiency and a 3.8x rise in platform conversions. Compared to previous benchmarks, this optimization resulted in a 212% higher ROAS, an 80% improvement in cost-per-outcome efficiency, and nearly a 50% reduction in bounce rates.
Enhancing Brand Awareness: New Ad Formats and AR Innovations
On the brand awareness front, Snap has launched new top-of-funnel ad products: First Lens Unlimited and State Targeted First Story. First Lens Unlimited expands on the previous First Lens product by offering unlimited impressions and frequency in the Lens Carousel for 24 hours. Early tests show a 25% – 45% increase in incremental impressions. State Targeted First Story allows US advertisers to tailor First Story takeovers to specific states or the entire country with different creatives, enhancing targeting precision.
Augmented Reality (AR) remains a key focus for Snap, with new AR Extensions extending AR advertising capabilities across all ad surfaces. Snap’s AR products, including dynamic and collection ads, are shown to significantly boost campaign performance. Pairing AR with video ads has resulted in a 1.6x higher Ad Awareness Lift on average, while Snapchat campaigns incorporating AR see 5x more active attention compared to industry standards.
Snapchat’s investment in machine learning and AI-powered tools, such as the ML Scribble World Lens and GenAI Copy Generator, further enhances the creative process. These tools enable advertisers to quickly create engaging content and localize ad copy efficiently.
As Snap continues to build on these foundational improvements, it aims to support advertisers in growing their businesses and optimizing their campaigns across the marketing funnel.
