How Snapchat plans to include commerce ads

Snapchat is taking a deeper step into direct response marketing with ads that are billed based on consumer actions, not just views.

The new approach to billing is another sign that shopping is coming to the platform, according to sources briefed on the plans. First, starting in April, Snapchat will start selling its app-install ads on a cost-per-install basis, a source close to Snapchat said. Next, coming in the late second quarter or early third quarter, Snapchat plans to allow advertiser to link out to their own sites. That’s expected to be a boon to product-minded advertisers. (Snapchat declined to comment.)

Snapchat is expected to get into shopping in two ways: clickable ads and brand-run channels, according to sources. Snapchat already hosts channels run by media partners like Cosmo, MTV, BuzzFeed, IGN and Tastemade. Last week, Snapchat’s newest board member and Cosmopolitan editor-in-chief Joanna Coles discussed the platform’s e-commerce ambitions. It also recently launched its first click-to-view and app-install ads, but they are charged according to the number of views.

Snapchat could be a digital lifeline for retailers.

“All retailers, especially ones with a young audience, are clamoring do something new in digital, and Snapchat is in a pretty sweet spot,” said Scott Symonds, managing director of media at digital agency AKQA.

With all the talk of ad fraud and ad blocking, there’s a need for platforms to sell ads according to a clear customer action that’s not just based on views, Symonds said. Target is among the retailers interested in using Snapchat for shopping, sources said. Youth-focused retailers like Alex and Ani and Forever 21 share actively to their personal accounts.

Snapchat would be just the latest hot digital property to embrace a shopping experience. It is going up against Google, Facebook, Pinterest, Twitter and Instagram.

“Commerce is a close cousin of content and there are a ton of content players out there,” said Azher Ahmed, director of digital at DDB Chicago. “It would make sense that they’re trying to close the loop and capture sales when people are ripe and ready.”

Snapchat has already been building the technological infrastructure to serve direct response advertisers, who need targeting, measurement and other tools. It’s working on an API — application programming interface — so ad tech partners can plug in and help sell more targeted ads.