Direct-to-consumer brands who have tested Snapchat's latest ad format say it's helping drive returns while bringing their cost-per-purchase down
- Snapchat's Dynamic Ads format is already working well for some e-commerce and direct-to-consumer brands.
- Snapchat is rolling out the new format today. Business Insider reported first that it was testing the dynamic ads format this summer.
- Brands including Princess Polly Clothing and Vitaly Design said the Dynamic Ads are helping cut the cost of ads and are increasing return on spend for them.
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Snapchat is rolling out a new ad format it's been testing for months, and some e-commerce and direct-to-consumer brands said it was already paying off for them.
Dynamic Ads let advertisers automatically create ads from their product catalogs and serve them to people on Snapchat in real-time, based on interest people have shown in the brand online. Business Insider broke the story about Snapchat testing the dynamic ads format this summer.
Such ads already exist on Facebook, Twitter, and Pinterest, and the new format is a way for Snapchat to make a bigger effort to grow retail, e-commerce and performance marketing dollars, sources previously told Business Insider. Advertisers can bid for Dynamic Ads on Snapchat's self-serve platform Ad Manager. The ads will be available to brands everywhere, but campaigns will only reach its US audience to start.
Advertisers say Dynamic Ads are working for them
Some DTC advertisers that have tested Dynamic Ads include Princess Polly Clothing, Vitaly Design, Shady Rays Polarized Sunglasses, and The Ridge Wallet, said Dynamic Ads are helping bring their cost-per-purchase down while increasing their return-on-ad-spend (ROAS) compared to other ad formats on Snapchat.
Snapchat has given brands discounts to get them to new formats, but didn't do so with Dynamic Ads, a company spokesman said.
Online retailer Princess Polly Clothing has been testing Dynamic Ads over the past month to retarget people. Dynamic Ads let it easily personalize the ad creative depending on the user and drive purchases, said Kim Zorn, its digital marketing manager. The retailer said its cost-per-purchase decreased by 60% while its return on ad spend is 171% higher than compared to other, similar product-focused campaigns.
For accessory maker Vitaly Design, Dynamic Ads let it easily reuse its product feeds to create ads, saving time and money, said Joe Cornfield, director of marketing at Vitaly Design. The company said it saw a 21% decrease in cost-per-purchase and a 29% increase in ROAS compared to other cross-platform e-commerce ads.
Retailers could import their product-catalog feeds on Snapchat to create other ads such as Story Ads, Snap Ads, and Shoppable Snap Ads since September, but until now, the ads had to be targeted manually. Dynamic Ads' automatic nature means the company doesn't have to create a new ad for every item, said Chris Ratterman, founder and CEO at sunglasses maker Shady Rays.
"Although it's early, we're seeing very promising results," he said, adding that Dynamic Ads campaigns resulted in a 66% decrease in cost-per-purchase and a 286% increase in ROAS compared to its other retargeting initiatives.
Snap is making a bigger play for e-commerce dollars
In recent years, Snapchat has been catering to performance-driven advertisers with initiatives like its self-serve ad platform, Snap Pixel, Product Ads, and Reach and Frequency-based buying. More recently, it launched the Snap Select program, tools for video marketers and updates to its non-skippable, six-second video ad format Commercials.
Snapchat has also been working to appeal to DTC advertisers outside of products. The company recently reorganized its sales team under its new chief business officer Jeremi Gorman, with a sales team dedicated to "emerging brands" or DTC brands. These reps frequently offer tips and credit to try out new formats, DTC brands like Curology have told Business Insider.
Snapchat's move comes as many DTC companies are shifting spending beyond the channels that helped propel their businesses, especially Facebook and Instagram to marketing channels like long-form video.
