Advertisers Embrace Instagram: Report Sees Further Potential In Video, Direct Response

instagram adsAdvertisers are embracing Instagram, with its video and direct-response potential gaining particular interest, according to a new report from social advertising and content marketing firm Brand Networks.

CPG, fashion and retail advertisers in particular have been quick to embrace Instagram, which proved to be a significant player over the 2015 holiday season.

The study examined more than 1.6 billion Instagram ad impressions through the Brand Networks Platform over a six-month period through the end of last year. Impressions increased from 50 million in August (while Instagram advertising was in its beta stage) to 100 million the following month and 670 million for December.

Impressions were particularly pronounced during the big holiday sales dates. For example, on Black Friday retail advertisers enjoyed 7.5 million impressions (compared to the average 3.3 million on average throughout November).

“Instagram advertisers are able to take advantage of the sophisticated targeting and objective-oriented capabilities available to Facebook advertisers,” said Jamie Tedford, CEO of Brand Networks. “These capabilities are currently some of the most robust in the industry.”

The growth in impressions was accompanied by a steady rise in cost to advertisers – from $5.21 average CPM in September to $7.20 on average in November – before it tapered off in December to an average of $5.94. This was lower for the CPG sector, which averaged $4.92 CPMs compared to the $16.93 CPM average paid by fashion advertisers. Tedford attributed this to the narrower audience fashion brands are aiming to reach, compared to the often wider, less specifically targeted CPG campaigns.

Advertisers in the “visual-centric” industries (as Tedford described them) of CPG, fashion and retail proved the earliest adopters of the platform, doubling their spend on Instagram through Brand Networks between Q3 and Q4 (though Brand Networks did not release exact figures).

While Tedford expects these verticals to continue flocking to the platform, he predicted that as the availability of video expands, the next wave will come from industries that are “experiential in nature” such as health, fitness and travel.

“We expect the percentage of video ads we serve on Instagram to grow substantially – perhaps as much as double – this year,” he predicted. “Instagram users spend more time interacting with brands who show short video clips. It’s a unique opportunity for brands, who have always struggled to capture shrinking attention spans on social media platforms.”

According to Brand Networks’ findings, video ads as a percentage of total ads served by Brand Networks shot from 9.54% in September to 22.52% in December.

Another area likely to evolve further in the coming months is Instagram ads’ direct-response potential. While the platform has historically been a link-free environment, Tedford has seen advertisers finding creative ways around this.

“We saw a lot brands test direct-response advertisements during the holiday shopping season, especially in the second half of December,” said Tedford. “As advertisers experiment, [call-to-action] buttons continue to infiltrate social feeds, and consumers are becoming more comfortable with the idea of social shopping.”

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