More than 150 million people — about 20% of Snapchat’s monthly users — have sent 10 billion messages to the chatbot, dubbed My AI, since its launch on Snapchat in late February. Users asked for everything from skincare recommendations to details on the latest sports car. And Snap will use this data for targeted advertising.
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My AI that is positioned “virtual friend on snapchathas already helped Snap diversify its revenue streams in a way most social networks struggle: through paid subscriptions. Initially, the functionality of the bot was only available to users who have such a subscription, but in April their total number rose to over 3 million.
But a much more meaningful way to increase income may not be at all. What data Snap gets from user interactions with the chatbot can be used to improve its advertising business, which accounts for the bulk of the company’s revenue. Snap’s advertising business is struggling, and in the first quarter the company reported its first revenue decline. My AI was released to all users two months ago and the huge influx of new posts could help personalize ads.
Snap and its peers are still recovering from changes to Apple’s privacy policy two years ago that drastically curtailed its ability to track.User’s digital footprint» and tailor ad delivery to specific audiences. This has forced social network developers to find new ways to find out the interests of individual users based on their activities in applications.
Snapchat’s main mode of interaction is private messaging, which gives the company little information about users. Instead, Snap primarily tracked the videos a person watched in “Stories” or in the Spotlight video feed. Additionally, Snap will now leverage conversations with My AI to further analyze users’ interests. The company has also started testing sponsored links from advertisers in chatbot conversations between users in the US, India, France and the UK. For example, it could be a link to a specific product in a conversation about clothing or beauty.
Ever since OpenAI released its ChatGPT chatbot, companies across all industries have been excited about the prospects of generative AI. Many of the most widely used consumer-facing applications have been implemented as chatbots that communicate in a human-like manner and provide answers faster than a user can find them online. On Wednesday, Google announced new shopping capabilities for its generative AI. Now it can help the consumer to search for goods as well as find tourist routes.
In addition to the advertising business, My AI Conversations Snap also helps improve its ranking models, the algorithms that show the most personalized content to a given user, and photo and video filters. The goal is to get users to spend more time with the app.
Sounds like an evil corporation? But Snap honestly informs users before interacting with the bot that the conversations can be used to personalize their Snapchat experience. And marketers are more likely to spend by placing digital ads with users they know might be interested in their products. For example, in more than 65 million chats users wanted to discuss cars, almost 8 million of them about specific brands: BMW, Kia, Ford and Volkswagen. And when it came to conversations about food, McDonald’s led the way, which was the subject of 5 million conversations with My AI.
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