Snap is launching a new AI-powered advertising tool aimed at small and medium-sized businesses (SMBs), marking its entry into AI-driven advertising solutions following similar moves by major tech platforms.
Market performance and strategic focus: Snap’s focus on SMBs has yielded significant results, with the company reporting strong financial performance in 2024.
- The company achieved revenue of $1.56 billion in Q4 2024 and $5.36 billion for the full year
- SMBs were identified as the largest contributor to ad revenue growth in 2024
- CEO Evan Spiegel highlighted SMBs as a key focus area during the company’s latest earnings call
New product rollout: Snap’s new smart budget optimization feature represents its first major step into AI-powered advertising tools.
- The feature automatically adjusts campaign budgets across assets to optimize advertising results
- While similar to existing tools like Google’s Performance Max and Meta’s Advantage+, Snap’s offering appears to be less comprehensive
- A company spokesperson described the feature as “comparable” to competitors’ tools, though not equivalent
Current market position: Snap acknowledges its relatively late entry into the AI-powered advertising space.
- New leadership hires close to the product team have recognized the company’s delayed entry compared to competitors
- The platform launched personalized templates in late 2024 to simplify ad creation for SMBs
- Snap is investing in additional resources specifically targeted at scaling its SMB segment
Industry perspective: Market experts view Snap’s SMB focus as strategically important for future growth.
- Industry analysts note that major platforms like Meta and Google have built substantial success through SMB advertising
- Jellyfish’s EVP of paid social, Shamsul Chowdhury, expressed interest in testing the new features despite the platform’s current limitations
- Sonata Insights founder Debra Aho Williamson emphasized the importance of making advertising more accessible to smaller businesses
Strategic implications: While Snap’s entry into AI-powered advertising tools marks an important step forward, the platform faces significant challenges in catching up to established competitors who have been developing these capabilities since 2021.
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