Snap stock pops after company announces plan to run ads in other apps

Key Points
  • The announcement comes during the company's Snap Partner Summit in Los Angeles on Thursday.
  • The ad platform is called the Snap Audience Network and allows advertisers to potentially reach a larger group than in advertising on Snapchat alone.
  • The network is scheduled to arrive in the "coming months."
Snap co-founders Evan Spiegel (R) and Bobby Murphy walk to ring the opening bell of the New York Stock Exchange, March 2, 2017.
Lucas Jackson | Reuters

Snap stock popped to close up more than 1% on Thursday after the company announced its forthcoming launch of a Snap Audience Network, which will sell ads that appear in apps other than Snapchat.

The news of the ad network comes as Snap made a slew of other announcements at its Partner Summit in Los Angeles, as it tries out new ways of making money.

Snap's descriptions of the network so far have been light on details, but the network may help Snap broaden its appeal to advertisers without having to gain users.

Snap has struggled with user growth — its worldwide average daily active user base was 186 million in the fourth quarter of 2018, the same figure as in the third quarter. Snapchat's average revenue per user was $2.09 when it reported fourth-quarter earnings in February, while Facebook made $7.37 per user during the fourth quarter. Aiming to gain an advantage over Facebook, Snap has tried to position itself as more focused on user privacy.

The company said the launch will come in the coming months.

Facebook has its own "Audience Network," which lets advertisers extend campaigns beyond Facebook into other mobile apps using the same targeting available for ads on its own platform.

Snap's vice president of partnerships Ben Schwerin announced the new audience network during the keynote address of the summit. The offering gives third-party app makers a new revenue stream with Snap's full-screen, vertical ads with "advertisers included," indicating it might make sense for companies that don't have the resources or background in selling ads. In online materials, Snap says its audience network is "built with our privacy-by-design principles top of mind."

Beginning Thursday, app makers can apply to get access to its Ad Software Development Kit, beginning with iOS integrations in the U.S. only. Snap didn't respond to a request for comment on whether the ad network already had any partners.

The company also announced a new ad-supported gaming platform during the summit Thursday. Six new original and third-party games are set to begin rolling out to the Snapchat app.

Snap introduces 'app stories' for third-party apps