Snapchat Looks to Improve Video Ad Results with Goal-Based Bidding

On average, Snapchat users view in-app video ads, created by video advertising software, for less than three seconds total. This is a major concern for advertisers looking to establish a larger presence on social media.

In response to this concern, Snapchat has recently turned to an intelligent, machine learning software technique called goal-based bidding. This gives advertisers an increased level of control, helping determine which users are most likely to engage with an ad while in the app.

Goal-based bidding, similarly to real-time bidding, allows advertisers to set parameters on where their ads are placed. Goal-based bidding, however, is unique in that its algorithm centers around user engagement. This means advertisers can bid on the level of interaction with a particular ad when the desired outcome is to have people swipe on the ads.

“Advertisers decide how much they value a swipe, and Snapchat automatically optimizes bidding and delivery to a subset of the advertiser’s target audience that has the propensity to swipe,” a Snapchat spokesperson said in a statement.

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Using this model, advertisers can determine how much to spend per swipe, while Snapchat automatically optimizes bidding and delivery to their target audience based on that information. The hope is that this cost-per-swipe system increases ad view time and overall user engagement.

“Around 20 percent of advertisers are already using goal-based bidding and it has helped them achieve up to 40 percent efficiencies in cost-per-swipe and increased ad view time,” a Snapchat spokesperson said.

Snapchat will continue to charge advertisers using goal-based bidding in the same way—on a CPM (cost-per-thousand impressions) basis—although ad value will vary depending on the advertiser.

The intelligent targeting option is available through Snapchat’s API (application programming interface). This allows advertisers to purchase Snapchat ads through third-party software vendors they already use to buy ads in other apps and digital platforms.

While goal-based bidding is an ad optimization improvement for Snapchat, advancements in artificial intelligence (AI), virtual reality (VR) and augmented reality (AR) will likely further change the in-app ad game in the coming years. Users will be provided with a host of new ways to consume in-app content, inevitably leading to the introduction of new machine learning options for advertisers.

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