Snap will focus on expanding and diversifying its struggling advertising business, with an emphasis on augmented reality, CEO Evan Spiegel told employees in a memo on Tuesday. This shift comes during a challenging time for Snap, as it competes for ad revenue against social media giants like Meta Platforms and TikTok.

Spiegel acknowledged the company’s lagging stock performance despite recent progress, attributing it to the slower growth of Snap’s advertising business compared to its competitors. Earlier in August, Snap provided a weak forecast for the current quarter, citing reduced ad spending, and is projected to generate $5.34 billion in revenue for fiscal 2024, according to LSEG data.

Snap’s stock has dropped by about 48% this year. To address this, the company plans to revamp its market strategy by introducing new ad placements driven by machine learning and automation. It is also investing in augmented reality and smart glasses, similar to Meta.

In June, Snap introduced generative AI tools that allow users to apply more realistic effects when recording videos with their phone cameras.