Snapchat Is Beginning to Use Machine Learning to Improve Ad Targeting

Marketers can start using the tool now

The high-tech gadgets are going wide after months of buzz. Snap Inc.
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Snapchat is adding ways to optimize campaign performance with the help of machine learning. 

Earlier this month, Snap Inc. began rolling out what it calls Goal-Based Bidding (GBB). The option, available to marketers buying ads through Snapchat's API, uses machine learning to know which users are most likely to swipe a certain type of ad.

Here's how it works: With goal-based bidding, advertisers can inform Snapchat of when their main goal is increasing swipe-ups—perhaps for app installs, web views or movie trailers—instead of focusing solely on impressions. They can then provide a value for how much they think a swipe is worth, allowing Snap to auto-optimize bidding and delivery to a target audience that's likely to engage with the ad.

While GBB campaigns are still charged on a CPM basis, Snap says the campaigns end up being more effective. According to Snap Inc. around 20 percent of advertisers are already using GBB, and those using it have seen as much as 40 percent improved efficiency in their cost per swipe. (They're also reportedly improving view time.)

Snap has also been making a big push to improve measurement. In 2017, the company plans to expand its line of partnerships with third-parties with more deals expected to happen early next year. (So far, Snap is working with 11 external companies on the measurement front including Moat, Oracle, Nielsen and Google DoubleClick.)

Snap—which is also slowly debuting its camera-equipped Spectacles across the country—has racked up nearly 50 patents in the past few years. According to CBInsights, Snap Inc. acquired four patents in 2016, and while it's nowhere near the 16 it received in 2015 or the 18 it received in 2014, it'll likely need to keep innovating next year. And what are all those patents for? Things like facial and object recognition, acoustic fingerprinting and real-time video calls.

Snap's expected IPO coming sometime next year will likely keep a fire lit under Snap to further innovate. According to a report yesterday in The Wall Street Journal, bankers and executives working with Snap want to portray it as in the same category as the likes of Apple and Facebook, while staying clear of Twitter's problem of overpromising and under-delivering to investors.

@martyswant Marty Swant is a former technology staff writer for Adweek.