Snap maps out 2026 ad strategy as growth slows and AR costs rise

Snap is outlining its advertising priorities for 2026 as the company faces user declines in key markets and prepares for a costly push into augmented reality hardware. The platform, which has seen stagnating growth in the U.S. and Europe and recently lost more than 400,000 users in Australia following the country’s social media age ban, is shifting its focus from audience expansion to maximizing revenue from its existing base.

Snap says its ad roadmap for next year centers on improving performance efficiency through expanded automation. The company’s Smart Campaign Solutions, introduced earlier in 2025, will continue to evolve with features including:

• Smart Ads, which test combinations of images, videos, and text to optimize results.
• Smart Targeting, a machine learning system that identifies high-value users; Snap reports an 8.8% average lift in conversions for early adopters.
• Smart Budgets, designed to simplify campaign management and automatically allocate spend.

Snap says the long-term goal is a largely automated campaign creation suite, reducing manual setup and speeding up optimization.

The company is also increasing its investment in AI-powered creative tools to streamline ad production. Earlier this year Snap introduced:

• Sponsored AI Lenses, which use generative AI to create personalized content featuring users.
• Imagine Lens, an open-prompt image generation tool that allows users to create or edit Snaps simply by entering text prompts.

In 2026, Snap plans to expand these features to support faster and more scalable creative generation for advertisers of all sizes.

The company is also leaning further into native ad formats that integrate with typical user behavior on the platform. Sponsored Snaps, which appear directly in users’ chat inboxes, have gained traction: Snap cites internal research showing that 85% of users consider the format relevant and aligned with their on-platform habits.

Snap is also growing Reminder Ads, which allow users to opt in to notifications for upcoming product launches, events, and releases. The format is designed to help brands remain top of mind without relying on repeated retargeting.

Snap’s emphasis on new ad tools comes as the company prepares for significant financial pressure from its upcoming AR glasses, set to launch in 2026. With competitors such as Meta and Apple investing heavily in spatial hardware, Snap faces a steep climb to compete in the wearables market.

With user growth slowing — compounded by regional bans and geopolitical restrictions — Snap’s path forward relies on extracting more value from its existing audience while building a more automated and AI-driven ad ecosystem.