Dive Brief:
- Priceline is the first travel brand to use Snapchat’s AI Sponsored Snaps, a conversational artificial intelligence ad format that launched earlier this year, according to news shared with Marketing Dive.
- Users opening Snapchat will receive a direct message from Priceline where they can chat with Penny, the travel-booking site’s agentic assistant. Details shared with Penny in Snapchat, such as planned travel dates, will translate over to Penny conversations on Priceline’s platform for a more seamless experience.
- Priceline is positioning the AI Sponsored Snaps experiment as part of its transition into becoming a more social-first brand. Snapchat is focused on accelerating ads revenue growth as it tries to reverse a slowdown and shift to more performance-oriented products.
Dive Insight:
Priceline is trying out Snapchat’s AI Sponsored Snaps in the ramp up to a holiday season when travel is expected to be more expensive due to higher fuel costs and stubborn inflation. Average domestic round-trip airfare for Thanksgiving was up 20% year over year on Priceline as of late October, Marketing Dive’s sister publication Hotel Dive recently reported. As consumers try to stretch their dollars further, more are turning to AI tools, including personal agents, to map out their trips and find deals.
Priceline has been shoring up a brand positioning around combatting soaring travel costs. In May, it brought back its Priceline Negotiator character in ads that showed William Shatner, who played the role in memorable TV commercials from the 2000s, passing the baton to Randall Park.
The Snapchat campaign is a way for Priceline to build awareness and adoption for Penny, a conversational AI tool that the brand revamped in June. Penny at the time added capabilities from Anthropic’s Claude models as part of a transition to becoming more “fully agentic,” including the ability to handle more complex user queries and surface real-time pricing comparisons.
Snapchatters who open Priceline’s promoted Snap message and engage with Penny will be able to seek out inspiration for travel destinations, develop an itinerary and identify places to stay. Those details will be preserved for consumers who then jump to Priceline to complete their travel booking. Penny converts users at approximately twice the rate of non-Penny users on Priceline, according to the company.
Snapchat introduced AI Sponsored Snaps in April, allowing advertisers to bring their own chatbots into a high engagement chat inbox interface on the ephemeral messaging app. The format is an iteration of Sponsored Snaps, a popular ad product that drives about 22% more conversions and 20% lower cost per action compared to other inventory on the platform.
Snapchat sees a bigger opportunity in the travel category, as two-thirds of surveyed users have added a destination to their wishlist after viewing it on Snapchat. Eighty-seven percent of Snapchat users make at least one trip for leisure annually, higher than non-users of the service, per press materials.
Snapchat for the past few years has been reworking its ad suite to be more centered on performance marketing solutions that can produce business results. The app has recently seen an exodus of advertising executives while its rate of ad revenue growth has fallen short of expectations, including due to declines in upper-funnel ad products. Snapchat’s revenue derived from ads increased 4% in Q3 while total revenue was up 14% for the period.
“While advertising revenue growth remains below our ambitions, advertisers are seeing the benefits of our performance improvements,” Snap CEO Evan Spiegel said in prepared remarks ahead of the company’s Q3 earnings earlier this month. “Our focus now is to turn these improvements into broader adoption, more meaningful share of advertiser budgets and more durable growth.”
