Instagram Stories Picking Up More of the Platform’s Ad Spending

October 30, 2018

This article is included in these additional categories:

Advertising Trends | Creative & Formats | Digital | Social Media | Spending & Spenders

Instagram has been getting meaningful ad spend relative to Facebook in recent months, and new data from Marin Software again indicates that it’s becoming a more important part of Facebook’s monetization strategy. In Q3, Marin indicates that its client advertisers spent 14.8% of their total Facebook spend on Instagram, more than double the proportion (6.5%) from a year earlier.

That’s not quite at the same level as seen among Merkle’s clients, who in Q3 spent about 19% as much on Instagram as on Facebook. But both firms report year-over-year growth in Instagram spend relative to Facebook, possibly as marketers chase young audiences, for whom Instagram is a better marketing channel than Facebook.

One of the notable findings from Marin’s latest quarterly benchmark relates to Instagram Stories as an ad spending destination. In this past quarter (Q3), Marin reveals that its clients spent one-quarter of their Instagram budgets on Stories. While that didn’t represent a meaningful change from the previous quarter (24.4%), it was triple the level from the year-earlier period, when advertisers only devoted 7.8% of their Instagram ad spending to Stories.

Facebook itself recognizes Stories as a growth vehicle. In its Q2 earnings release transcript [pdf], Facebook’s CFO mentioned that “Instagram is growing more quickly [than Facebook] and making an increasing contribution to growth” and that “Instagram has more heavy usage of Stories, so that’s an area of continued growth opportunity because the effective levels of monetization in Stories are lower.”

It’s true that overall, advertisers aren’t yet devoting that much spend to Instagram Stories. Considering the overall investment in Instagram relative to Facebook, Marin’s data suggests that Instagram Stories only occupies 3-4% of total Facebook ad investments. That’s a number that seems destined to rise, despite the premium paid by advertisers for Instagram ad placements (CPC of $0.83) versus Facebook in Q3 (CPC of $0.19).

After all, Instagram users value brand content more in Stories than in the feed, and marketers are making budget decisions based on where their audiences are more receptive to their content

About the Data: Marin notes that:

“To create its Q3 2018 Digital Advertising Benchmark Report, Marin Software aggregated data from customers who invest billions of dollars in combined annualized ad spend on paid search, social, mobile, and eCommerce. Marin Software only includes those advertisers active on its platform for the past five quarters, measuring key performance indicators on a year-over-year and quarter-over-quarter basis, and removing any outliers with significant YoY or QoQ changes.”

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