Instagram Stories on the Way to Half of the Platform’s Ad Revenues

August 30, 2019

This article is included in these additional categories:

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

Instagram has progressed from a little app where users shared photos of their beautifully presented meals to a social media platform that a majority of digital marketers consider to be essential to their business in the future. Instagram Stories, in particular, is where marketers are putting their faith and ad dollars, with recent data from Marin Software revealing that Stories’ share of Instagram ad spend among its clients has jumped in the latest quarter.

During the first two quarters of 2019, Instagram’s share of Facebook’s total ad spend remained flat, from 19.5% share (Q1 2019) to 19.2% (Q2 2019) after a steady increase throughout all of 2018. However, fully 45.1% share of Instagram’s total ad spend is now being spent on Instagram Stories as of the end of the first half of 2019, up from about one-third in Q1.

The news just gets better for Instagram, with Q2 2019 data from Merkle showing that Instagram ad spend among Merkle’s clients has grown by 85% year-over-year (y-o-y). Furthermore, Instagram’s impressions were up 208% y-o-y while its CPM dropped by 40%.

So what are the factors that might account for Stories taking an even larger share? Analysis from Marin suggests the following: “Features like Instagram Story Links and Highlights are keeping social audiences more engaged, as Instagram slowly becomes more of a direct selling tool. And, although its CTR is almost the same as Instagram Feed, advertisers should note that the cost of Instagram Stories is significantly lower.”

Facebook’s strategic shift towards a greater emphasis on e-commerce has been highlighted previously on MarketingCharts, with plans to forge deeper integrations across the Facebook family of apps (i.e. Facebook, Instagram, WhatsApp and Facebook Messenger) being seen as pivotal. Instagram’s image focus also lends itself well to shopping, as consumers prefer visual to text information when shopping online.

Aside from ad spend, Marin Software reports the less-than-promising news (for advertisers at least) that across social media channels CPCs have increased from $0.21 in Q1 2019 to $0.28 in Q2 2019 while, at the same time, CTR dropped from 1.58% to 1.27%. CPM also experienced a 4.1% increase to reach $3.55 in Q2 2019.

That being said, the influence of Amazon’s ad offering (in conjunction with Google Shopping) appears to have had a positive impact for advertisers. E-commerce click volume in the second quarter of 2019 was 47% higher than in Q3 2018, while CPC rates were 15% lower over the same period. These figures are similarly echoed by the earlier Merkle report.

More data from Marin Software can be viewed online here.

About the Data: Figures are based on aggregated data from Marin Software customers who invest billions of dollars in combined annualized ad spend on paid search, social, mobile and e-commerce and who have been active on Marin’s platform for the past 5 quarters.

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