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Snap plans to run more programmatic ads, or ads bought on software and not through human negotiations, on Snapchat Shows, according to Digiday.
The news comes after the company struggled with empty ad slots inside its Shows, as it previously chose to focus on selling Shows ad inventory directly. Snap has run programmatic ads on its Snapchat shows before, but was initially reluctant to run programmatic ads during its first cycle of shows, which significantly limited Snap’s ad revenue.
Snap can more easily scale its ad business and fill inventory through programmatic than direct sales. Relying on direct sales requires Snap to have representatives communicate with prospective advertisers. This is more time consuming than using programmatic, which is an automatic process and faster than direct sales. Additionally, programmatic can reach more potential advertisers than direct sales, as Snap ad buys can be made by any prospective advertiser on Snap’s self-serve platform, or through its ads integrations from partners like Kenshoo and 4C.
Improving ad sales on Shows is important as the company dives further into creating original programming. The company partnered with NBCUniversal to form a digital content studio for creation of original programming. This indicates Snapchat is doubling down on creating TV-like content for its platform, a move that would naturally increase the amount of ad inventory it possesses, which the company will be more easily be able to fill through programmatic.
Snap has released a slew of ad tools that could help turn advertisers into return customers. The company’s recently released self-serve ad platform allows brands to buy and track ads. Additionally, the company recently released Snap Publisher, which helps advertisers create video ads for Snap’s vertical video format. These tools make it easier to create ads and track their performance on Snapchat, which it could leverage to more consistently fill ad slots on its shows.
Kevin Gallagher, research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on programmatic TV advertising that:
- Forecasts US programmatic TV ad revenue through 2021.
- Highlights the top beneficial attributes of PTV.
- Explores some of the top barriers and challenges to PTV adoption, including measurement hurdles and fears around commoditizing TV inventory.
- Outlines strategies some networks are taking when incorporating PTV in their upfront offerings.
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