Snap Inc. Utilizing 10 Billion AI-Generated Messages to Enhance Advertising Services
Snap Inc., the creator of Snapchat, is experimenting with methods to utilize its recently popularized AI chatbot to enhance the company’s advertising operations.
More than 150 million people — about 20% of Snapchat’s monthly users — have sent 10 billion messages to a chatbot called My AI since it went live in late February, the company said Thursday. Users have asked about everything from skincare recommendations to the details of the latest sports car.
My AI, which calls itself a “virtual friend on Snapchat,” has already helped Snap diversify its revenue stream in a way that many social media companies have had to: through paid subscriptions. When the feature first rolled out to paying users of the app, Snap’s subscriber count topped 3 million in April.
In what could be an even more lucrative revenue addition, Snap is using what it’s learned with the chatbot to refine its advertising business, which generates most of the company’s revenue. Snap’s advertising has struggled, and the company reported a drop in sales in the first quarter. My AI opened up to all Snapchat users two months ago, and the flood of messages could help Snap improve the way it personalizes ads.
Snap and its partners are still reeling from a change Apple Inc. made to its privacy policies two years ago that significantly reduced the ability to track ads and target specific audiences in apps. This has forced social media companies to come up with new ways to learn about individual users’ interests based on in-app activity.
A key feature of Snapchat is its personalized private messaging, which gives the company little insight into the user’s activity. Instead, Snap mostly gleaned clues from the videos a person watched in the app’s publicly posted Stories or Spotlight video feed. Now Snap is starting to use conversations with My AI to better target commercial messages based on users’ interests.
The Santa Monica, Calif.-based company has also begun a test where advertiser-sponsored links are included in conversations with My AI. That could eventually mean including a link to a product in a conversation about clothes or beauty, topics that have already generated more than 28 million chats with My AI among users in the US, India, France and the UK, the company said.
Companies across industries have been excited about the potential of generative AI since OpenAI released the ChatGPT chatbot. Many of the hottest consumer-facing uses have been in the form of a chatbot that talks in a human-sounding voice and spits out answers faster than a human can look them up on the Internet. Alphabet Inc’s Google on Wednesday announced new generative artificial intelligence tools for shopping that help consumers find products and travel destinations.
Outside of advertising, My AI’s conversations are also helping Snap refine its fundamental placement models — the algorithms used to show the app’s most personalized content and lenses and photo and video filters to a given user. The goal is to attract users to spend more time with the application.
“We see huge potential with My AI to improve the relevancy of the content we provide to Snapchatters across the service, whether it’s showing the right creator, an AR experience, or mobile video from our advertising partners,” said Rob Wilk, Snap’s head of Americas. said in an email.
Marketers are more likely to spend money to show digital ads to users they know are interested in their products. Snap has already made My AI a resource to ask for recommendations, while letting users know in a popup before chatting that conversations can be used to customize their Snapchat experience.
The discussions have been about areas of interest and certain brands. Take cars, with more than 65 million conversations, nearly 8 million of which are about specific brands, including BMW, Kia, Ford and Volkswagen. Or food, where McDonald’s has been the subject of 5 million My AI conversations.
