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Xue said the company was working towards rolling out behavioral targeting capabilities in the third quarter of 2016, according to the "Snapchat Advertising" report.
Snapchat declined to comment.
Business Insider understands that Snapchat will, at this stage, only be using behavioral data from users' activity in the app.
What that means is if users were heavy consumers of basketball content, for example - perhaps following an NBA Snapchat account or consuming lots of content on the ESPN Discover channel - advertisers could target them around categories such as "sports" or "basketball."
The fine line between "targeted" and "creepy"
Snapchat won't, at this stage at least, be using data from web browsing behavior that takes place outside of the app in order to serve targeted ads.
There is a possibility that could come later. Last month Snapchat introduced its first "log in with Snapchat" button inside the Bitmoji Keyboard app the company quietly acquired earlier this year. The button lets people sign in with their existing credentials, rather than having to create a separate Bitmoji account.
Snapchat also rolled out its first advertising API (application programming interface) in July, which allows advertisers to buy, optimize, and analyze their Snapchat ad campaigns through third-party companies.
EMarketer spoke to a number of Snapchat's partners who suggested the company might be looking to launch more sophisticated targeting options soon, via the API - not least as several of the firms specialize in cross-channel and cross-device audience matching and targeting.
Johnny Horgan, vice president of global partnerships at marketing technology company Amobee, said in the report: "We are an API partner with Twitter, Facebook, Pinterest and Instagram, and we have direct integrations with 850 websites. We have access to a lot of data and are hoping to be able to leverage that to activate media through Snapchat. That's something that will come down the line, and we're excited about it."
However, Snapchat's CEO Evan Spiegel has long advocated against "creepy" ads that track users as they traverse around the internet.
Snapchat's Privacy Center also states: "We want you to feel understood. We want to understand what's relevant to you and your life, and we want to show you things that you'll care about. At the same time, we don't want to serve ads that are so custom-tailored that they feel invasive or uncomfortable."
So retargeting - the advertising industry word to describe the method used by Facebook above - seems highly unlikely for now. It looks as though any behavioral targeting will be limited to broad categories, rather than serving ads based on very specific interactions you have made inside the app.
Nevertheless, advertisers are likely to cheer the news. One of the biggest criticisms about Snapchat from the advertising community is that it doesn't offer the kind of sophisticated targeting and measurement options that they can get from the likes of Facebook or Google.
Snapchat - which only began selling ads in late 2014 - has made leaps of progress in this area, though, increasing its targeting options to six types and signing more than 10 ad measurement partnerships.
Jed Hallam, head of digital strategy at global media agency Mindshare, told Business Insider: "[Snapchat introducing behavioral targeting will] be great for advertisers. There are two developments that would significantly improve the advertiser experience in Snapchat: behavioral targeting and the ability to segment audiences by ID - email, mobile, etc. Snapchat has always remained very loyal to user needs, and so even if those two got introduced, I'd imagine it would be done in a very sensitive way and not in a particularly creepy way."
These are all the advertising targeting options Snapchat currently offers:
- Device/operating system
- Mobile carrier
- Content affinity (placing ads in the Discover channel that are appropriate for the type of content they are sitting next to)
The eMarketer report also predicts Snapchat will increase its userbase to 217 million by the end of 2017, up from 150 million in 2016.