The Definitive Guide to Scaling Snapchat Ads

Last month, Right Side Up’s Diane Le and Ryan Jones led a session in our Fall Webinar Series to dig into Snapchat ads. You’ll find a recap of the material they covered below, and you can view the full recording here, including a great Q&A that starts ~30:40.

The Emergence of Snap as a Performance Marketing Channel

Snapchat was founded in 2011, but it wasn't until a few years ago that it emerged as a viable performance marketing channel for growth marketers. Let's take a look at the three main drivers that led to this change.

1. Audience growth

When it comes to active users, Snapchat started to achieve significant scale around 2015, which you’ll see in the graph below.

2. Ad revenue growth

In other words, advertiser competition. Ad revenue has trailed audience growth a bit, but has grown pretty linearly, as you can see in the below graph. A few years back, there was a window where ad dollars were growing at a slower rate than active users, which created a window of opportunity for early adopters. Much of the ad spend during this early period could be categorized as brand advertising, not performance marketing.

3. Ad technology improvements

For a long time, this was the gating factor for success for performance marketers. It wasn’t until Snapchat’s ad and targeting technology evolved 2-3 years ago that marketers began to see promising results. Today, their ad tech is pretty mature, though still probably trailing behind Facebook.

When is it Time to Test Snapchat Advertising? 

There are a number of factors that can help you decide whether it’s time for your business to start testing Snap ads. Here are four of the top considerations to keep in mind.

1. You're looking to diversify your marketing channel mix. This is a perfectly valid reason, especially given the volatility we've seen in Facebook CACs this year; if you’re too dependent on one channel, it’s a serious business risk because you can’t control all of the variables.
2. You’re starting to see diminishing returns on other marketing channels. As you scale, you should expect decreased marginal returns on your ad spend. While a channel like Facebook may outperform Snapchat on the first dollars you spend on the platform, at a certain point, the balance will shift in favor of other channels. 
3. You’ve got a strong product-channel fit. Does your product or service align closely with Snapchat’s demographic? More importantly, can you insert yourself organically into the Snapchat user experience? If the answer to these questions is ‘yes,’ it’s probably worth prioritizing Snap over other potentially viable channels.
4. Snap is a very testable channel. An important factor when considering whether or not you should test any marketing channel is test-ability. How easy is it to test, learn, and optimize? How quickly can you enter and get out? Relative to other channels like direct mail, Snap is very test-able; it’s a self-serve platform, and it’s quick and easy to spin up and wind down campaigns, shift ad budget, get results, and iterate.

How Should I think About Test budgets and Timelines for Snapchat Ads?

This is a question we get all the time from our clients. Unfortunately, there’s no perfect answer; it’s highly circumstantial based on the nuances of your business. That said, here’s a framework for how to think about approaching a Snapchat ad test campaign.

Start with the end objective. What do you need to do to learn if this can be a viable channel for you at scale? Get line of sight to your target CAC/ROAS while minimizing cost and time to test.

How to achieve your testing objective. You need to spend enough time and money to test, learn, and optimize (and allow Snap’s algorithm to do the same) to get sufficient conversion data to identify patterns of what’s working and what’s not.

What are the contributing factors?

• How targetable is your audience? For a channel like paid search, you may be targeting product level keywords; you don’t need as big of a test budget, given that you’re already constraining your targeting to an audience that’s likely highly qualified and already expressing intent for what you’re offering. For channels like Facebook and Snapchat, you’ll need to cast a wider net and allow the algorithms to optimize on your behalf.
• What are your conversion event (i.e. transaction, lead capture, app install) and conversion rate? If you’re selling a bag of coffee for $15, you’ll have a higher conversion rate than if you’re selling treadmills for $3,000. The amount of ad spend required to properly test will be very different for these two products.
• How long is your sales cycle? 
• How much user data does the ad platform have to correlate impression with conversion, and how sophisticated is the targeting algorithm?

What is a rough guideline for testing the channel? Very generally speaking, we recommend a budget of about $5-10K/mo for 3-4 months for most consumer products for a channel like Facebook/Instagram; a bit less for Google search, and ideally a bit more for Snapchat ads. You should see a positive trend within this test period. If you hit the 6-8 week mark, and you’re still an order of magnitude away from your CAC/ROAS goal, the odds are slim that you’ll be able to close the gap with additional testing and optimization. However, if you’re 50% of the way to your CAC/ROAS goal, there’s a high likelihood you’ll be able to close the gap by continuing to optimize your creative and allowing the algorithm additional time to learn.

What are the risks? Spending less during a test period may get you the performance you’re looking for, but may also produce a false negative.

Snapchat Ad Best Practices: Setting up your campaigns for success

Once you have all of your event pixels implemented and/or MMPs in place, you’ve got three main levers at your disposal when it comes to setting up your Snap ad campaigns for success: audiences, creative, and bids/budget. Let’s take a look at each.

Audience: Don’t find your audience, let your audience find you.

Contrary to platforms like Google or Pinterest, where we have to be very industry-specific in our targeting, Snap’s Audience Insights algorithm has become very sophisticated at optimizing into your top-performing leads without needing restrictive targeting.

Snapchat has a huge unduplicated audience incremental to Facebook and Google. There are 238 million active users, 38% of which are not on Instagram, and 46% of which are not on Facebook. That’s a very large untapped audience!

There’s also a common misconception that Snapchat’s audience consists of mostly female Gen Z. We’ve actually seen that male and female millennials in their 20s and 30s are the higher converting LTV audience. In fact, they contribute to $1 trillion dollars in direct spending power.

Targeting: How do we target this large audience?

Start with broad targeting

Snapchat’s algorithm performs best starting with broad targeting. The only segmentation you’ll want to start testing (depending on your product, service, and/or app) will be age or gender segmentation.

Let’s walk through an example. If you’re selling women’s shoes, and your target audience is female, you’ll want to do an age split in users under 30 vs. users over 30, and start from there. After about a week, you’ll be able to use Snap’s Audience Insights technology to hone in on what demographics your ads are performing best in. To do this, click into View Insights, and a reporting chart like what you see below will pop up. You’ll be able to toggle by Swipe Ups, Installs, or Purchases, or another event you have in place. 

The above example shows data from the top-performing ad for the women’s shoe campaign with broad targeting, segmented by users ages 18-25. The top-performing interests were investors and entrepreneurs, yoga enthusiasts, and comedy fans—not groups you’d typically target initially when thinking about running a women’s shoe campaign. This is why it’s a great idea to start broad when it comes to Snapchat ad targeting.

Once you have this data, you can then deploy Snapchat’s built-in Datalogix and Experian interest targeting to target your top-performing demographics by action. Again, you can choose Swipe Ups, Installs, or Purchases.

One last pro tip: When testing each ad set, use exclusions to target your audiences away from each other and avoid potential overlap. For example, if you’re targeting new parents and Spanish speakers, exclude Spanish speakers from your new parents test, and new parents from your Spanish speakers test. After years of testing, I’ve gotten much cleaner data when these exclusions are in place.

Custom audiences

Aside from built-in interest targeting, Snap also has a built-in audience manager where you can create custom audiences based on customer lists (e.g. high LTV users), ad engagement, and app and web events. These lookalike audiences can be built by reach, similarity, and balance.

1. Reach: This will be your largest audience, with the broadest similarity to your seed audience.
2. Similarity: This will be a much smaller audience, but will have the closest resemblance to your seed audience.
3. Balance: This will be a blend of Reach and Similarity. This option typically yields the most favorable conversion rates, but it’s a good idea to test all three concurrently at a small budget.

It’s also worth noting that unlike Facebook, exclusion lists for custom audiences in Snap will need to be updated manually. Aim to refresh them at least once every three months to avoid accidental retargeting.

Snapchat ad creative best practices

Creative assets are arguably the most critical element to a Snapchat ad campaign’s success.

The first thing to know when it comes to Snapchat ad creative? Snapchat users are vastly different from Instagram and Facebook users. Nine times out of 10, what works on Facebook won’t work on Snapchat. This means you cannot repurpose top-performing content from your other paid social channels; you’ll need to customize and tailor your content specifically for Snapchat.

Next, familiarize yourself with Snap’s different ad formats, and test every single format. Once a winning template is unlocked (e.g. copy, price bubbles, color schemes, etc.), double down and iterate on this format. These can often run for three to five months without needing a refresh.

So, what are the best practices for the top performing ad formats?

Static and video ads

Static and video ads are the top-performing format across app install and web ecommerce campaigns. They’re easy to upload and iterate on, and they account for the bulk of Swipe Up (click-through) conversions.

• If you have a product-focused ad, highlight any discounts or promotions with a price bubble or price slash.
• For ecommerce campaigns, model the items you’re selling and be sure to show functionality.
• All ads should have a human element to them, e.g. hand, foot, shadow, anything that shows there’s someone on the other side.
• Use minimal text to call out any value-add, promotion, and CTA.
• Move through images/slides quickly in order to get the user’s attention right off the bat, and be sure to mention your brand up front. You’ll start to see drop off after five to eight seconds.

Story ads

Snap’s Story Ads are tap-through tiles that display on the Discover Feed. They are the highest-trafficked placement and will typically see the highest view-through conversions. Although they perform well, they decay at a much faster rate and usually require a refresh after one to two weeks.

It takes time and effort to create these assets, but you can avoid a creative bottleneck by having two to three cover tiles on deck and switching up your headlines, rather than doing a full creative refresh.

• Use UGC to create a tap-through story with a big reveal and/or CTA at the end. Brand-specific reviews and testimonials work best, and you can repurpose these from YouTube.
• Use CAPTIONS on your asset, as many users view ads with sound off.
• Add fun emoji elements, but keep it simple and clean. 😊 👍

Collection ads

Collection ads are shoppable ads that are great for ecommerce advertisers with diverse product selections. Many advertisers have trouble cracking these, so let’s look at two common mistakes.

1. Individual products are often not deep linked correctly. Each item should link back to the product URL, while the main Swipe Up should lead back to your homepage.
2. While the products in the collection need to look and feel cohesive, make sure you differentiate each individual product image in the collection by changing up the colors, positions, and models where possible. When the ad looks too uniform, it’s more likely to be dismissed by the user as being too salesy.

How to test Snapchat ad creative

Now that we’ve outlined the top-performing ad formats, let’s talk about best practices for testing them.

First, you’ll want to create a different ad set for each format, and test three to four creatives with each audience. We recommend a maximum of four creative assets per ad set—even if you have a larger budget—to allow each creative an opportunity to serve. 

These creative assets will need at least three days of runway time before optimization begins; do not touch the ads before then. After three days to one week, you can then start to swap out your softer performing ads to cycle in new ones.

After adequate runtime, you can view insights for higher-performing creatives to see which demographics are converting at scale to iterate assets by audience. 

For example, as seen in the two charts below, we ran an age breakout test for a client and found that grittier sustainability and eco-conscious messaging performed better with a younger audience, while more polished lifestyle messaging worked best with an older audience. Using this data, we iterated and adjusted ad copy for each audience in order to achieve scale.

Ad copy

Keep it simple and straight to the point, focusing on discounts and value propositions. Snapchatters of all ages aren’t using the app to read literature; they’re using it to consume visually appealing content.

Story Ad headlines should be kitschy and clickbaity. They should catch a user’s attention and be as daring as possible without breaking brand guidelines. Examples: you won’t believe, you’ll never guess, etc.

Video and static ads should feature short, strong CTAs and highlight your value proposition. 

What advertisers are doing Snapchat ad creative well? 

Unfortunately, Snap doesn’t have an ads library like Facebook’s, but the advertisers we’ve mentioned above are top performers, along with Truff Hot Sauce and Wish (examples below). Both of these brands get a really large share of voice and their ads are pretty effective.

This Truff Hot Sauce ad conveys a human element with the hand, the text is short and sweet, the ad models the functionality of hot sauce – overall, it's just really simple and really effective.

This Wish Snapchat ad is more cluttered than the other ads we've showcased, but it represents a great example of dynamic catalog ads, which perform well and highlight product price points and discounts.

To find inspiration for your own Snapchat ad creative, you can still use the Facebook Ads Library to look at Instagram story placements. Many advertisers cross-test creatives all the time, regardless of whether or not they work. This will give you an idea of what kinds of ads advertisers may be running on Snapchat. You can also download Snapchat and check out the Discover Feed; as you’re swiping through, you’ll be served an ad every few Snaps. It's a great way to get a read on what other brands are doing!

Bidding and optimization

Depending on the industry you’re in, you'll be able to optimize toward different conversion goals. When testing different optimization and bid strategies, it’s important to stay organized. Keep each campaign concentrated to one goal or bid type, as the learnings from each ad set affect each other when they’re in the same campaign.

When starting out, all advertisers will be limited to just Swipe Ups or Installs. Snapchat needs 50 attributed conversions in a seven-day window to unlock other events such as sign up, purchase, add to cart, and other event bidding optimizations. We recommend testing autobid under Swipe Up conversion for the first week. After other events have been unlocked, you can use pixel or custom lookalike audiences to target into each goal.

Bid types

Run autobid first to establish your baseline. After that, you’ll have two main bidding types: Target Cost and Max Bid. We recommend testing these in tandem to start, but if you need to move quickly:

For Traffic, App Install, and Sign-Up campaigns: Lean into Max Bid optimization. Start at about 20% above your target, and work down. Allow at least a three-day runway time before adjusting your bid so as not to reset it back into the learning phase.

For Purchase campaigns: Lean into Target Cost optimization. Start at about 30% above your target cost and work down. You’ll also want to allow at least three days of runway time here before optimization.

Bids may seem high, but Snapchat will only charge you one cent above the highest bidder, which is why we want to start on the higher end, get our baseline, and work our way down. Snap has also started to roll out minimum ROAS bidding, although it’s still in beta and has not yet yielded favorable performance results.

Interested in discussing a Snapchat advertising strategy with the growth marketing experts at Right Side Up? Reach out to us at hello@rightsideup.co and we'll get back to you stat.