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How Snapchat’s Location Feature Could Benefit Its Ad Business

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Test of Status and Passport features on in Australia

Snap (SNAP) is testing features that will allow Snapchat’s users to announce their locations and what they’re up to and to keep a record of all the places they’ve been, according to a recent report from TechCrunch.

One of the features, Status, lets people use Bitmoji characters to share where they are and what they’re doing there. Status details will be visible to friends who users share their location information with. The other feature, Passport, is designed to be a private digital diary for Snapchat users. Passport keeps a history of all the places users have visited and what they did there. Snap is currently testing these features with select users in Australia.

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Advertising is Snap’s bread and butter

For Snap, the Status feature could go a long way toward boosting its advertising business by enabling it to better target advertisements to Snapchat users. For example, with knowledge of where Snapchat users are and what they’re up to, Snap can help businesses such as restaurants and retailers better promote themselves to Snapchat’s audience.

Snap generated revenue of $389.8 million in the fourth quarter. Although Snap has stopped breaking down its revenue sources, the company derives almost all of its revenue from advertising. Advertising contributed 98% of revenue at Facebook (FB), 96% of revenue at Yelp (YELP), and 87% of revenue at Twitter (TWTR) in the quarter. Alphabet (GOOGL) derived 83% of its revenue from advertising in the quarter.

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