Following a rather weak first quarter, where the stock took quite a hit for Snap, it presented its pitch to advertisers in NewFronts by IAB, which brought about new ad products and opportunities. Here, Snap's new President of Americas Rob Wilk, formerly Microsoft's head of Advertising, and Chief Creative Officer Colleen DeCourcy discussed a test that let Snap partners use its new AI feature, My AI, to surface sponsored links in front of users. It announced new ad slots, such as the ability to buy reservations of the first video ad that appears in a user's Snapchat Friend Stories, and the option to place ads within its TikTok-like Spotlight feature.

It's a crucial moment for Snap's ad business, since it was the first time the sales declined as a public company even though Snapchat users jumped 15% year over year to 383 million.

The tech industry's first-quarter results made very clear that the advertising rebound that helped lift Meta during Q1 wasn't yet lifting the wider social app ecosystem. Snap wasn't alone in feeling those impacts — Google's YouTube business saw its ad revenue decline by nearly 3% in the quarter. By opening up new ad products to marketers, Snap has the opportunity to drive revenue increases as it finds more places to insert ads into its mobile app.

Although many of the ad slots Snap announced today were more traditional placements, one of its announcements stood out.

At the event, the company discussed how Snap could use its new AI feature to put sponsored links in front of users — something Snap CEO Evan Spiegel had teased during earnings.

My AI, which has just become available to all users of Snapchat in the past month, now can make suggestions of Lenses and Places from Snap Map, and will shortly be able to send a generative Snap back to users who have Snapchat+, alongside having text-based conversations with users.
It confirmed today that it had started testing sponsored links within conversations with My AI which will connect users to relevant partners relevant to the conversation. For example, if a user is asking where to eat, then My AI can return a sponsored link from a local restaurant or food delivery application. If a user was speaking of a weekend getaway, My AI could return a sponsored link from an airline or a hotel. Or if a user was talking about a video game, users might receive a link to a similar game from a local retailer.

Snap says it's still in an early experimental stage with this feature and wants to make sponsored links as useful as possible.

It also pointed out that the learnings from AI could introduce mobile video powered by conversational intent to Snapchat users for the first time and noted how users' conversations with the AI would help Snap to serve more relevant content across its app, including in areas like Stories and Spotlight. In other words, it sounds like what users talk to the AI about could then change the experience of what they see elsewhere in the app.

To help with that, Snap says it's saving all of its AI conversations and will only delete them when a user manually deletes them.

It's worth noting how fast Snap is running with the addition of the AI feature. The company just over a month ago said it was still looking for qualified AI experts to join its Safety Advisory Board. It also launched the AI product to global users before introducing parental controls — though it says those are coming. Meanwhile, Snapchat users have been panning the AI with one-star reviews amid complaints that the feature can't be removed from their Chat tab without paying for a subscription.

Other Snap announcements today included Spotlight, its TikTok clone, which debuted in 2020. Snapchat started testing ads within the product last year and, during last week's earnings, Spiegel said Spotlight now reaches 350 million monthly active users — a figure that's up 170% year-over-year.

The company is now opening Spotlight to global advertisers, it said at NewFronts.

For a start, spotlight ads will be served as automatic placements by the service, and advertisers can manage those through the Snapchat Ads Manager. Of course, there's a risk buying ad slots next to any user-generated content, but Snap says it moderates that spotlight content before it reaches any wider audience, which minimizes the chance that marketers' content would appear next to hate speech or some other harmful content.

In addition, Snap launched a new takeover ad product called "First Story," which allows an advertiser to reserve the first Snap Ad (the video ad slot between Friend Stories) that users would see. The company compared the product, which it said is in high demand, to the existing offerings like First Commercial and First Lens, that also allow advertisers to reserve the first spot in other parts of Snapchat's app. Being the first story in friend stories increases one's probability of reaching a user before they leave. Daily reach for this in the US, says Snap, goes above 50 million.

Global rollouts for First Story ads start today, and Warner Bros. has become the client to help it mark out its coming feature "The Flash".

The company also announced today that it's making it easier for brands to work with Snap creators through Snap Star Collab Studio in the U.S., its service that helps brands source, partner and drive results with Snap Stars, as it calls its top creators and other public figures on the app. The new Studio will facilitate partnerships by connecting brands to preferred production partners — Studio71, Beeline by Brat TV, Influential and Whalar — who will create and execute their sponsored Stories and creative.

Throughout the year, Snap will expand its API and introduce additional paid amplification tools that will reach more users with brands' creative.

Snap also announced a range of new content partnerships at today's event, including plans to work with the Women's World Cup, which joins its existing partners, NFL, NBA and WNBA in the sports realm. Women's World Cup will bring exclusive content to Snapchat's Stories, Spotlight and Camera for its upcoming tournament, the company says.

"Snapchat is all about real relationships, and where over 750 million people come every month to build connections and have fun with friends, families, and their favorite creators," Wilk said. "We're thrilled to share at NewFronts how those real relationships drive real influence for brands as we announce new innovations and features across Stories, Spotlight, Creators, My AI and more."