Snapchat Inc. is reported to be holding discussions with various advertising agencies about building an API for its popular messenger app.

If it did so, it would be the first time Snapchat has moved into ad tech, according to Digiday, which first broke the story. It adds that Snapchat’s API could be ready for testing as early as this spring. Predictably, Snapchat has declined to comment on the story.

If Snapchat does develop an API, it would allow the company to massively expand its ecosystem of advertisers and the kinds of advertisements it can offer. For example, it could facilitate “direct response” ads that promote app installs. Additionally, an API would enable better programmatic user targeting for advertisers and improve ad order placement, creative delivery and analytics.

Up until now Snapchat has done advertising the old-fashioned way by dealing directly with brands and their PR agencies. It’s also pushed a lot of brand-labeled content through its Discover Feature.

Still, you can only go so far doing things the old-fashioned way, and for a company that’s supposedly as serious as Snapchat about making money, it’s time to get creative. And the easiest way to do that is to just use an API like other social/messaging platforms such as Twitter and Instagram have done.

Risky, but lucrative

The move into ad tech could help Snapchat reap millions of dollars in rewards, but it isn’t without risk.

The most notable example is Instagram, which only opened up its API last August but is rumored to have provided a massive boost to the Facebook-owned app’s revenue. We’ll know for sure just how big a boost when Facebook reports its Q4 earnings on January 27, but analyst Mark Mahaney of RBC Capital Markets has already predicted Instagram will be Facebook’s “Story of 2016”, while MEC Global’s head of social media for North America Noah Mallin reckons client spending on Instagram has improved by a whopping “11,000 percent” since the API was launched.

Despite the potential rewards on offer, ad tech also presents a challenge too. For one thing, Snapchat has already attracted criticism in the past for its “creepy” and “intrusive” advertising, and will need to be careful it doesn’t turn off its younger user base.

Another problem is that advertising agencies will need to adapt their technology platforms for Snapchat’s API, but it remains to be seen how many will be willing to do so.

Finally, Snapchat will need to ensure it retains total control over how its API is used, having having suffered in the past from developers misusing its private API.

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