Will a lack of targeting be Snapchat’s downfall?

The messaging app can’t scrape data like Google and Facebook can, meaning its advertising appeal is limited to big brands with a broad consumer base

Ever since last year’s Cannes Lions Festival, where Snapchat was the darling of the young tech companies strutting their stuff, industry professionals have been waiting for the company to make a serious push into scalable advertising. Snapchat’s advertising revenue is growing at an impressive rate, rising from $59 million last year to a projected $250-350 million this year, but this has mainly been on the back of branded geo-filters, lenses and sponsored stories.

While, so far, this has been reserved for only the brands with the biggest budgets, it seems that Snapchat is now on the verge of supercharging its advertising offering by forging new partnerships with third-party creative agencies that produce content for brands, as well as API platforms that facilitate the buying and delivery of ads on the app. All of this will help make managing ad campaigns on Snapchat much easier for brands and agencies alike.

A few months ago, the platform rolled-out auto-advance stories, a process that automatically plays friends’ stories one-after-another, creating a seamless video-roll of everything you’ve missed since your last visit. It’s here that they plan on inserting what they term ‘Snap Ads Between Stories’: ads that automatically play between your friends’ posts.

While this might be good news for the company, as well as for brands and agencies that want to experiment with new ways of reaching younger consumers, there’s still one aspect that I feel will hold back Snapchat from reaching the same scale and accessibility as Facebook and Google when it comes to advertising – and that’s targeting.

Snapchat simply doesn’t have as much info on its users’ demographics and tastes as some of the other competitors vying for advertising dollars. With the advanced targeting options offered by Facebook and Google, based on a mountain of user data and search behaviour, advertisers can laser-focus their ads. In this digital age, and especially on digital channels, advertisers expect this level of precision.

Without these options for advertisers, Snapchat is a bit more like TV; great for big brands with big budgets that want a broad reach, but less suitable for smaller companies with smaller budgets to experiment with. Accessibility and flexibility are the Holy Grail of any scalable self-service platform.

While Snapchat lacks the detailed user info and search behaviour data that Facebook and Google have, there is still a way that it may be able to accurately segment its users. I generally maintain that ‘interests’, as opposed to demographics, is a more meaningful variable for profiling. After all, we live in a post-demographic world in which it has become less accurate to segment consumers based on age, gender or location.

While Facebook, for example, has an endless treasure trove of its users’ stated interests, Twitter bases much of its targeting on the themes and topics that users frequently feature (via keyword tracking) and on the high-profile accounts they follow.

As there is little text-based content from its users to scrape, Snapchat will have to approach this kind of content tracking in another way. You can imagine its engineers are already busy working on new ways of analysing what users are snapping about, and better assessing high profile accounts so as to more accurately profile followers. With Instagram trying to muscle in on Snapchat’s turf with a new ‘Stories’ feature, it will have to tackle this fast.

Snapchat is a seriously engaging platform and, as such, is well placed to feature ads that entertain and engross users. Think Facebook Canvas-style immersive scrolling pages and videos for brand awareness campaigns, click-to-buy snaps for sales-based campaigns, and simple info-entry forms for lead generation campaigns. All this could happen within the app itself rather than bringing users to a separate website or landing page.

CEO Evan Spiegel may have previously said publicly that Snapchat is against ‘creepy’ targeted advertising that follows you around the web. But if it can nail targeting within the app and scale the success it’s had with some larger brands to brands with smaller budgets as well, then it can really start looking towards competing with Facebook and Google for a broader range of advertising dollars.