Snapchat just made it easier for small businesses to buy ads

Key Points
  • Snap now allows advertisements paid for with credit cards, with prices starting at a few dollars.
  • Snapchat is also adding 25 new partners to help businesses design and measure their ad campaigns.
Evan Spiegel, co-founder and CEO of Snapchat
Getty Images

Snapchat introduced new products on Monday that could make the platform easier and more useful for advertisers.

With a new tool called Ad Manager, the social media company now allows customers to buy advertisements with credit cards in the U.S., with prices starting at a few dollars, making the service more accessible to small businesses. While Snap will still ensure the quality of the ads before they are posted, the prices will be set by auction, not by Snap.

Snapchat is also adding more than 25 new partners to help businesses design and measure their ad campaigns. In July, Snap will also release a browser-based tool for businesses to more easily to import logos and trim videos for their Snap ads.

The tools could help Snap's highly-produced augmented reality and video ads compete with Facebook's dominance in small business ads, especially in mobile. Facebook chief operating officer Sheryl Sandberg said last month that 70 million businesses use Facebook pages, and 5 million businesses actively advertise on Facebook (most starting with free pages "because it's easy to use.")

"We know marketers want to compare results across platforms and placements. Historically, we've enabled larger marketers to do this," Sandberg said in an earnings conference call with analysts. "In Q1 we started testing a set of advanced measurement tools that make it easier for marketers of all sizes to compare the effectiveness of Facebook, Instagram, and Audience Network alongside other publishers."

Even Facebook struggles with measuring its advertisements, having reported multiple errors over the past few years. But interviews with advertisers show that Snap presents its own difficulties.

Snap's stock hovered just about $1 above its March IPO price on Monday amid a steep sell-off in the tech sector. The stock has fallen about 18 percent over the past three months, amid slower-than-expected user growth in the first quarter.

Still, Snap executives have pointed to its users' tight-knit friendships and high engagement as evidence it provides a different quality of audience than Facebook and other ad platforms. Chief strategy officer Imran Khan said last month that Snap is in the process of educating advertisers on its measurement capabilities.

"I think as you build your sales force you're educating more [of the] market; as you are launching self-service, it reduces the friction for advertisers to buy advertisement on a platform," Khan said at the JPMorgan Global Technology, Media and Telecom conference, according to a FactSet transcript.