Instagram ad spend is increasing: How does it affect your strategy?

Instagram ad spend is increasing: How does it affect your strategy?

Instagram is becoming more popular and brands are willing to increase their advertising budget in the platform. Here’s everything you need to know before adjusting your Instagram ad spend.

Instagram has become one of the fastest growing platforms on social media the last few years. It’s engaging, it’s growing at a steady rate and more brands are eager to become more visual to respond to the changing consumer habits. Moreover, Facebook’s support has brought the platform closer to its monetisation and it has recently introduced new e-commerce features.

The rise of Instagram

Why has Instagram become so popular? Here are some key stats to consider:

  • It has reached 1 billion monthly active users
  • There are more than 400 million people watching Stories on a daily basis
  • 65% of teens believe that Instagram is the best marketing channel to reach them
  • Instagram is the place that Millennials are more likely to watch Stories
  • 39% of US female adults use Instagram
  • 42% of women on Instagram love shopping and consider it a hobby

Instagram is a very engaging platform and it didn’t take long for brands to experiment with new visual ideas in it. It is the channel that can bring brands closer to their audience to build a community of engaged followers. 80% of accounts follow at least one business on Instagram, which means that there is a great opportunity to build an audience that wants to learn more about your brand.

Brands are increasing their ad spend

According to Merkle’s report, Instagram’s ad spend has increased by 177% YoY in Q2 2018.

Facebook may still hold the reins in advertising, but Instagram manages to make 23% as much spend as Facebook in Q2 2018.

The increasing need to advertise a business on Instagram led to 20% more ad impressions than Facebook and 9% more clicks.

Instagram’s impressions increased by 209%, while Facebook saw its impressions decreasing by 17% YoY.

Mobile seems to dominate ad spend, reaching 82% of the total ad spend on Facebook for Q2 2018. It’s no surprise that ad clicks are also dominated by mobile users, reaching the impressive number of 92% of all ad clicks on Facebook.

What do these stats mean then?

  • Facebook still dominates ad spend mostly due to higher CPMs
  • Instagram is a growing platform that advertisers are willing to try out
  • Both ad budgets and impressions seem to be on the rise on Instagram
  • Mobile seems to dominate ad spend

Instagram’s increasing engagement brought the increased ad spend with more brands trying to reach a young audience while trying to stay away from Facebook’s negative sentiment.

It is estimated that Instagram’s ad revenues will reach $6.84 billion in 2018, up from $1.86 billion in 2016.

Instagram Stories have played a key role in this explosive growth.

A growing opportunity with Instagram Stories Ads

Instagram Stories provide an immersive full-screen experience and it was only a matter of time for Ads to show up. Brands have a big opportunity of reaching a highly engaged audience that consumers Stories on a daily basis.

According to Instagram, there are more than 300 million active Instagram Stories users while more than 50% of businesses create at least one story every month.

Instagram Stories are quickly turning into a very powerful way for brands to drive action.

Source. Brand Networks

OpenTable talked about their success with Instagram Stories on Instagram’s blog:

‘Our Instagram Stories campaigns have proven to be some of our highest ROI campaigns to date, while also driving a significant volume of reservations. This ad format not only delivers performance, but also effectively engages our best customers with crave-worthy content.’— Tom Caterina, Digital Marketing, OpenTable

How can you create successful Instagram Stories Ads then?

Instagram presented a Facebook-commissioned study for advertisers to help them create more effective ads in Instagram Stories. Here are the key points to consider:

  • Aim for relevance – top performing ads are ranked higher in relevance so always create ads that make sense to your audience
  • Create short ads – top performing ads are shorter and highlight branding earlier rather than later in the ad
  • Don’t be afraid to showcase your product – only half of the ads include product demos but these seem to perform better in key metrics
  • Always create mobile-optimised ads – make sure your ads are made specifically for the best practices of the particular content type

If you want to learn how to create amazing Stories, this video tutorial from Facebook should help.

Story School

Learn how to create impactful stories across Instagram, Facebook, Messenger and WhatsApp Status.

Posted by Facebook Business Now on Wednesday, 12 September 2018

Instagram Feed VS Instagram Stories Ads- what’s the difference?

Instagram seems to present a great opportunity for advertisers to promote their products. But what’s the best content format to invest in? Is it better to focus on the Instagram Feed or should you jump in the new trend of Instagram Stories?

From my personal experience on brands of smaller scale, Instagram Ads seem more expensive on Feed comparing to Stories. This may have to do with the particular audience and the bidding competition, but still, both types of ads serve for different objectives.

Instagram Stories seemed to have a better CPC when trying to drive action, but Instagram Feed Ads brought a better ROI in terms of reach.

Source: VidMob

Socialbakers and their recent report seem to agree with my personal observation as they found out that the CPC for Stories ads is way lower than the ads running in Instagram’s main feed.

This is due to the increasing competition to make it in the main feed and the fact that not all brands are ready to build specific content for Instagram Stories.

Thus, early adopters of Stories ads seem to be rewarded for the time spent to build tailored ads.

Still, smaller brands are afraid that once the competition increases on Instagram Stories Ads the cost will become prohibitive for them. Although we’re still not there yet, some brands are experimenting with the idea of advertising on Facebook Stories rather than Instagram Stories. They still follow the same formatting but they’re cheaper as the competition is still low.

What we can learn is that advertisers are certainly eager to spend more time on producing vertical content and the challenge will be to keep up with the trends so that you use your ad spend accordingly.

Instagram seems to be a good choice for your next ads provided that they are aligned with your objectives and your target audience. There’s no need to spend your budget in a trending platform if there’s no indication that it matches your goals. Thus, you’re more than welcome to try out new ads in an engaging platform but always be prepared to adjust your strategy, either between Feed and Stories or even outside the platform, to ensure that you get the best ROI.

What’s next?

All the stats indicate that Instagram is turning into one of the most engaging social platforms. More brands are tailoring their marketing strategies to include their Instagram advertising plans.

As Facebook becomes more expensive, Instagram is benefiting from the fact that it’s both engaging and appealing. It may be part of Facebook’s family but it has strategically managed to stay away from the Cambridge Analytica narrative of scandals. Its monetisation is heading to the next level and it’s better to jump on its advertising trend rather earlier than later.

The big question is whether Instagram will eventually end up with a saturation of ad space and increasing ad costs due to the competition. We cannot predict the future yet and it’s not something that we should overlook.

Since then, it offers a great opportunity with Feed and Stories ads and there might be an additional opportunity in the future with IGTV advertising.

As with every social platform, it’s good to be safe by not investing all your ad budget in one channel.

Spend the right amount of time to understand where your audience is and be ready to adjust your social media marketing strategy for 2019.

As for now, the best way to make the most out of Instagram is to understand the power of vertical content and how to create the best ads for Stories. It can be the key to building an effective Instagram strategy.


Leave a Reply

Close Menu