Snap Doubles Down on Immersive Ads
Immersive ad formats like augmented reality (AR) continue to hold promise, though they’re largely still in early adopter phases among brand marketers and SMBs. We’re talking about ad formats that utilize the camera (Gen-Z friendly) to offer 3D interactivity, such as virtually trying on shoes or shades of lipstick.
No company has embraced this opportunity more than Snap. Not only has it popularized AR lenses by having them piggyback on media/selfie sharing, but it’s monetized that traction. In fact, Snap explicitly credits AR lenses — or “camera marketing” — for its growth during the past few years of ad revenue acceleration.
It turns out that the same qualities that make lenses viral also create favorable performance in their sponsored instances. Products shown in greater visual dimension have higher conversion rates and lower e-commerce returns than non-immersive benchmarks. This applies to large and small advertisers alike.
All of the above has caused Snap to continue doubling down on AR — mostly seen through updates to its Lens Studio AR development platform and the evolving formats it offers to brand marketers. This recently culminated in two new programs to further stimulate AR marketing: Snap’s AR Lab and its Arcadia creative studio.
Let’s take those one at a time.
Snap recently launched the AR Lab with ad agency giant WPP. It’s meant to set advertisers on the right foot with onboarding tools, educational materials, and development resources. This will ease those first steps for brands to jump into immersive ads and camera marketing.
Breaking it down further, the AR Lab offers custom strategy guides with best practices for successful AR lens campaigns. For example, it espouses tactics on how to convert lens interactions to e-commerce purchases. It also offers optimization scorecards to track AR lens campaigs in real-time.
Stepping back, the idea is generally to continue growing lenses past early-adopter brands. The beauty of AR lenses for Snap isn’t just growth so far but the market headroom still to come. Most advertisers haven’t yet experienced the benefits of these immersive formats, especially local businesses.
Why is that? Some advertisers aren’t convinced, some need more education, and others are simply stuck in their ways, as it often goes with the habit-bound brand marketing world. So the AR Lab is Snap’s way of reaching these uninitiated and unconverted brands. And WPP is its bridge to get there.
As for where it will find success, growth in AR advertising could come from going deeper in verticals where Snap has already gained traction, like fashion and entertainment. Growth could also come from new verticals like food and travel or in moving down-market to SMBs and multi-location brands.
As for vertical areas of opportunity, AR’s ability to create favorable brand engagement is also evident in hard goods, given the ability to visualize products remotely before buying. This makes AR primed for retail and e-commerce, especially in the Covid era when additional product dimension in remote shopping is valued.
Just weeks after launching the AR Lab, Snap completed the one-two punch with the launch of a full-fledged AR creative studio. Known as Arcadia, it will work with brands and ad agencies on creative and technical levels to translate their marketing goals to AR campaigns and experiences.
This will play out as a studio of record for brands or as smaller atomized engagements such as project-based work and educational partnerships (the “teach a man to fish” approach). Arcadia already has brand clients signed up including P&G Beauty, Verizon, WWE, and Shake Shack.
Notably, Arcadia bills itself as platform-agnostic. It will operate beyond Snapchat’s own walled garden, including AR experiences that live across platforms, web, and apps. Doing so could help it cast the widest possible net and appeal to brands with a range of campaign objectives.
Given this agnostic approach, a question that arises from Acadia’s launch is why? What has motivated Snap to launch its own AR creative studio, and what ends could it achieve? One answer involves following the money; in a broader sense, AR is the engine behind Snap’s revenue growth as noted earlier.
But why a creative studio? Snap’s ongoing AR development involves championing the technology and accelerating adoption among brands and agencies (just like with AR Lab). That can be an uphill battle of market education. By acting as a creative studio, Snap can show rather than tell, leading by example.
There’s also likely a bit of market research involved in this move. As a creative studio, Snap can learn advertiser needs and pain points first hand as well as competitive intelligence on other AR platforms. Those learnings can be fed back into Snap’s Lens Studio to make it a better platform.
So, there you have it. AR Lab and Arcadia are just the latest moves in Snap’s ongoing AR development and its actualization as a “camera company.” Both efforts attest that AR has lots of “political capital” at Snap these days.
Add it all up and Snapchat continues to see real results from its AR development efforts, which has motivated it to continue doubling down on the technology. This can be seen in robust feature development in Lens Studio as well as its visual search tool Snap Scan. The latter has ample local commerce implications, too, as we’ve examined.
Beyond product-based developments, Snap is investing to develop an ecosystem. That includes cultivating the Lens Studio creator community, as well as AR Lab and Arcadia. Expect rapid-fire investment to continue as Snap reinforces its AR lead and brings camera marketing to a wider base of brand marketers and SMBs.