Snapchat will now provide advertisers the ability to use offline data to market to its 150 million daily active users.
How? The social media giant is teaming with the Oracle Data Cloud, formerly called Datalogix, to provide advertisers data about users' offline purchasing history to hyper-target ad campaigns. According to AdWeek, STX Entertainment, Kia, Honda, and The Honest Company will all be testing the new capability.
Why? In the past, Snapchat received backlash for giving advertisers minimal ability to custom-target its users, which hindered their ability to compete with the likes of Google and Facebook in winning advertising contracts. A 2015 eMarketer report cites a 'Social Advertising Effectiveness Scorecard' where industry executives rate leading platforms in their ability to market users through advertising. Snapchat received a C- for "ad targeting effectiveness" and D+ for "ad measurement and analytics effectiveness."
Under pressure: The Oracle partnership is newsy given that 18 months ago, Snapchat founder and CEO Evan Spiegel vowed not to be "creepy" in how the tech giant utilized users' offline data to retarget them. However, that was a year and a half ago, when the company was valued $6 billion less than what it is now and before it was exploring an IPO, forcing them to demonstrate advertising appeal to investors.
Our take: Spiegel's right that overlaying offline user-data affects user experience, but Snapchat can't compete with other platforms to win over high-end ad contracts, particularly for retail campaigns, without doing so. As we noted earlier this month Snapchat users are four times less likely to use the app for e-commerce than Instagram, which recently rolled out commerce-driven ad features for their stories feature that rivals Snapchat. According to AdWeek, STX Entertainment's test campaign with Snapchat using offline purchasing data is meant to drive ticket sales specifically.