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Snapchat strikes strategic partnership to boost ads

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(Bloomberg) — This time last year, Snapchat Inc. was the hot new thing in social-media advertising — except that brands couldn’t tell if the promotions actually worked.

Next week in France, at the Cannes Lions gathering of advertising executives, Snapchat will make the case that it now has many more ways to show return on investment. In the past 12 months, the company has done 10 partnerships with outside firms that can vouch for and measure the effectiveness of its ads. Snapchat will highlight a recent alliance with Oracle Corp.’s data cloud, showing that its marketing tools can boost in-store sales.

At Cannes, Snapchat will tell advertisers that “we have listened and we have worked really hard — and all of the major partnership solutions you’ve asked for, we have a good number of them in place,” said Clement Xue, global head of revenue operations at the social-messaging and media application. “I don’t think there’s any other publisher or platform that has put together these measurement partnerships as quickly as we have.”

Snapchat’s application for sharing disappearing photos, video and images, which has 150 million daily users, was recently valued at $18 billion after a financing round, people familiar with the matter have said. The company’s executives have been making the measurement deals in response to criticism that the its ads are too expensive, given that they have lacked information about the people who see them.

Snapchat is competing with sites such as Facebook Inc., which can tell advertisers detailed information about an ad viewer’s demographics and interests. Companies can also more easily see something they posted go viral, while Snapchat’s videos and photos disappear after they’re viewed.

According to Oracle, at least, Snapchat’s ads are working. As part of the data partnership, announced Wednesday, the company said 92 percent of ads for consumer packaged goods drove higher in-store sales. By analyzing Snapchat marketing campaigns for products such as deodorant and cereals, Oracle aims to help retailers improve their success, the company said in a statement.

Still, working with advertisers to provide the data they need to justify Snapchat campaigns is an “ongoing process,” Xue said. The company has been hiring from Google, Facebook and Twitter Inc., and in March added two executives to focus specifically on ad measurement. Snapchat’s other recent ad-tracking deals are with Google’s DoubleClick, to verify whether people saw ads, and Moat, to help measure video ads.

With a fast-growing mobile app used by young people, Snapchat’s early ad offering attracted chief marketing officers at the biggest brands that would pay for the chance to be the first to try something new and learn from it. Now, the application is working to mature into a regular and growing part of their budgets.

“We want to be an advertiser-friendly business,” Xue said.

See also:

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