Instagram is pushing ads into its Snapchat-like Stories feature
Lara O'Reilly
Instagram CEO Kevin Systrom.
Reuters Pictures/Lucas Jackson
Instagram is moving quickly to introduce ads into Stories, the Snapchat-like feature it added in August that allows users to share a series of photos and videos that disappear after 24 hours.
The company announced Wednesday it is testing full-screen video ads within Stories with around 30 global advertisers, including Airbnb, Nike, Netflix, and ASOS.
The ads will be signposted with text reading "sponsored" and they will be a maximum of 15 seconds long.
Instagram says 150 million users interact with Stories each day, up from 100 million daily active Stories users in October. By comparison, Snapchat also has 150 million daily active users.
In addition, 70% of people on Instagram follow a business, while one-third of the most-viewed Stories so far have been produced by businesses, explaining the rationale for inserting advertising into the section.
Here's what an ad for ASOS might look like in a typical Stories feed:
Speaking to Business Insider, Instagram director of product management Vishal Shah, described the launch as an "unmatched ad experience for businesses in Stories."
While Shah agreed that the format is similar to ads users may be familiar with on Snapchat, the combination of "targeting, measurement, reporting" and the ability for advertisers buy Stories ads with the self-service tools they use for other Instagram ads make it a superior product.
Shah said Instagram couldn't comment publicly on the amount of ads users are likely to see on their Stories feeds, but added: "One thing that we our proud of is our thoughtful rollout of ads in the [main] feed. We will be applying that same level of rigor, a blend of art and science [to the Stories rollout]. We feel pretty good about using a lot of that playbook for what we are going to be doing [on Stories]."
Pricing will be dictated by an online ad auction, with advertising slots going to the highest bidder.
At first, Instagram will just be offering Stories ads based around a reach objective (advertisers looking to reach a certain amount of mothers, living in the US, aged between 25 and 40-years-old, for example) but it will soon expand that to other outcomes, such as a certain number of users swiping up on the ad to visit a website or to download an app — much in-line with Snapchat's offering.
Instagram also said on Wednesday its Business Tools dashboard will now include analytics about Stories, including metrics such as reach, impressions, and replies. Those analytics are generated by Instagram itself and are not yet verified by third-party measurement firms.
Facebook, Instagram's parent company, does not break out Instagram's advertising revenues in its earnings. Research firm eMarketer estimates Instagram will generate $3.64 billion in global ad revenue in 2017, up 96% year-on-year.
Separately, Facebook is also testing "mid-roll" video ads that will appear within videos shared by media companies on the platform, according to several media reports.
Both moves are indicative of Facebook looking at creative ways to increase the ad load within its apps. The company can't continue to keep flooding the Facebook and Instagram feeds with more and more ads, but it can look to increase its ad load by monetizing the various features that sit within the apps — like Instagram Stories or Facebook's Instant Articles.
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More: Instagram Video Advertising Snapchat