Snapchat expands AI ad tools and Sponsored Snaps as it targets performance-driven growth

At the 2025 IAB NewFronts, Snapchat introduced a range of updates aimed at enhancing its advertising suite, signaling a firm shift toward automation, performance, and broader reach across its core features. The platform unveiled AI-powered campaign tools, new Sponsored Snap capabilities, and a music-focused content initiative, all designed to meet advertiser demand for measurable results and user-centric engagement.

One of the most notable advancements is Snapchat’s Smart Campaign Solutions, a suite that introduces Smart Bidding and Smart Budget features. Smart Bidding enables advertisers to set a target cost-per-action (CPA), which Snapchat’s machine learning systems will work to meet in real time. The Smart Budget tool reallocates ad spend to the highest-performing ad sets within a campaign, promising more efficient use of budgets. Both features are currently in alpha testing and reflect Snapchat’s increasing reliance on automation to drive performance outcomes.

Snap is also evolving how brands can engage users in the app’s Chat Feed—its most used feature—with Sponsored Snaps. Originally introduced in 2024, this ad format now includes new features like First Snap, a single-day takeover delivering a high-impact message directly into Chat. In addition, Snapchat is integrating Sponsored Snaps into its ads auction system and enabling Sponsored Snaps from Creators, allowing influencers to deliver branded messages straight from their handles. This aligns with broader trends in creator-led advertising, giving brands access to more native and authentic placements.

Another new addition is Web and App Auction Ads, which let advertisers target users through specific Goal-Based Bids, such as app installs or website actions. These updates position Sponsored Snaps as a more performance-driven and scalable format within Snap’s ecosystem.

To complement its ad product enhancements, Snap also announced Under the Ghost, a branded music performance series filmed at its Santa Monica studio. The series, designed for Gen Z and millennial users, will offer brands sponsorship packages that span multiple ad formats including Sponsored Snaps, creator content, and Total Takeovers. This initiative adds a cultural and community-oriented dimension to Snap’s media offerings, with potential for high engagement.

Snapchat is further extending brand visibility through Promoted Places on the Snap Map, which now reaches over 400 million monthly users. This feature allows physical businesses to surface organically within user discovery experiences on the map, offering a localized and actionable ad format.

Rounding out its NewFronts presentation was the launch of a new brand campaign, “Say it in a Snap,” aimed at framing Snapchat as the platform for real, unfiltered moments. The campaign will run across out-of-home placements in key New York City locations including Times Square and Madison Square Garden.

Despite the flurry of new tools and formats, Snap remains cautious about market conditions. While the platform posted 14% year-over-year revenue growth in Q1 2025—driven largely by direct-response ads, which made up 75% of ad revenue—it declined to issue guidance for Q2, citing broader economic uncertainties.