Snapchat advertising jumps 73% as companies use app to track where people are shopping

Companies can tell which shops people are going to using geolocation data, allowing them to target their ads more specifically

Tracking technology helped Snapchat increase its income from advertising spend but raises privacy concerns (Bloomberg)

Advertising spend on Snapchat soared 73 per cent in the third quarter of the year, driven by features that allow companies to track where customers shop so that they can target their ads more effectively. Companies also spent 55 per cent more on Instagram over the three months, according to new data.

Location information from Snapchat features, including Placed and Snap Map, gives companies detailed information on where customers are, and when they enter a shop. This has allowed firms to more accurately measure how effective each ad is, encouraging them to spend more, according to media technology company 4C Insights, which compiled the figures.

Ad spend increased 31 per cent across the board on the major social networks with Facebook, Twitter, LinkedIn and Pinterest all registering strong growth.

Companies were also willing to pay higher rates for an advertising slot on Facebook, with the average cost per click and the average cost per thousand impressions increasing 9 per cent and 18 per cent respectively, partly thanks to Facebook’s improved targeting and measurement tools, 4C said.

Pinterest advertising grew 26 per cent as new advertisers were drawn by a subscriber base in excess of 200 million users.

Scott Shamberg, president of marketing agency Performics, said Pinterest had made strides thanks to the advance of visual search, which allows people to find what they are looking for by using a picture. This has proved particularly useful in the fashion and design industries, which are the focus of much of Pinterest’s content.

Instagram Stories, which allows users and companies to post short video clips, saw a 220 per cent rise in the amount advertisers spent year-on-year. Social media is increasingly geared towards video and that has in turn become a key area for companies to advertise, 4C said.

To assess social advertising growth, 4C analysed almost $250m (£190m) in media spend from more than 1,000 individual brands managed through its platform.

Online advertising has been in the spotlight this year after it emerged Facebook and Google had been making money from adverts placed alongside extremist content. The companies have also been accused of failing to stem the flow of fake news.

The two companies faced losing millions of pounds of advertising earlier this year after it emerged that some ads were appearing alongside videos of Islamic extremism, rape apologists and the Ku Klux Klan. More than 100 large firms suspended their Facebook or Google marketing.

Hillary Clinton this week reiterated criticisms of Facebook, which has been accused of allowing Russia to buy adverts aimed at influencing the 2016 US presidential election.

Ms Clinton said of Facebook on Sunday: “They have to answer the questions and come clean, they have to share the ads, they have to reveal all the different sites that were operated by Russians posing as Americans, foreign money coming in. They owe it to our country."