Since Snapchat released its advanced Pixel targeting capabilities to advertisers in June, some direct-to-consumer companies say they are seeing up to a 50 percent lower cost-per-acquisition since applying the Pixel, prompting some to shift spending from Facebook and Instagram.
DTC company Lounge Underwear used to pay between $65 and $80 to acquire each new customer in the U.S. on Snapchat. After applying Snapchat’s Pixel, the costs dropped between $26 and $40, said Josh Elliott, head of marketing at Lounge Underwear. Seasonal subscription box FabFitFun, one of the first beta partners when Snapchat introduced the Pixel to select advertisers, saw 36 percent lower CPAs at the end of September, said Alyssa Perry, senior director of Marketing at FabFitFun. Acne-treatment seller Curology began using the Pixel in June and is now seeing up to 40 percent lower CPAs depending on the campaign, said Fabian Seelbach, svp of marketing at Curology.
Marketers say two ways the Pixel is driving decreased CPAs is its ability to bid on conversions rather than swipes, which allowed marketers to serve ads to people who are more likely to convert rather than ones just more likely to swipe; and the power to retarget Snapchat users that visit their websites.
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