Since our first Instagram advertising report in 2015, Instagram’s advertising ecosystem has matured to great lengths. On the advertising front, advertisers have seen Instagram Stories (and corresponding ads) as well as Instagram Shopping support extended to more countries, including the UK and Australia.
To help you grasp the ever-evolving world of Instagram, we’ve created another report—this time, we looked at results from the dawn of Instagram’s API back in November 2015 through the first half of 2018.
Explosive Growth and Price Stability
Advertising spending on Instagram managed through Brand Networks has rapidly and consistently ballooned since the introduction of advertising on the platform in 2015. Instagram ad spend increased by 9X between 2015 and 2017 with a growth rate of at least 57% each year.
While demand increased, the same cannot be said for price inflation in relation to cost-per 1,000 impressions (CPM). In fact, the average CPM has mostly held steady. Overall, Brand Networks witnessed a small increase in average CPMs in 2017 but is observing a return to 2016 norms in 2018.
Users and Ad Impressions Expand In Tandem
Advertisers started delivering Instagram ads through an invite-only Beta powered by select Facebook Marketing Partners, including Brand Networks, in July of 2015—a point in time when Instagram had approximately 400M monthly active users. In June of 2018, Instagram reached 1B MAUs. To put the platform’s user growth in perspective, Instagram is expanding at roughly the same rate Facebook did in its early years.
As Instagram’s user base grows, the world’s biggest brands and agencies have gravitated to the platform. Pulling back the veil and looking at the total number of Instagram ad impressions served since the dawn of Instagram advertising, Brand Networks observes an increase of at least 46% every year (2015 through mid-2018).
The Race is Over: Video Has Already Won
Video remains the shining star on Instagram due to the platform’s immersive video ad type and features that keep users engaged and consuming video as a mainstay activity. Brand Networks served about as many video impressions by the end of June 2018 as the company did in all of 2017.
In the first half of this year, video content made up 66.2% of the total ad impressions served on Instagram, evidence that the advertising experience for users on Instagram is led by video on both Feeds and Stories.
CPM by Vertical: A Four-Year Retrospective
With the exception of Financial Services brands, industries that Brand Networks collected CPM data over this period maintained steady price efficiency, ultimately hovering around the annual rollup benchmarks each year.
While the reason behind Insta- gram’s steady price efficiency cannot be known for certain, the pricing continuity offers dramatic evidence that Instagram is a highly stable, mature advertising ecosystem. The fact that you can now reach over 1B MAUs on the channel is a testament to the scalability of this efficiency and further evidence of the channel’s potential impact on advertisers.
Four years ago, Instagram’s advertising offerings didn’t come close to those of Facebook. Today, Instagram has over 1B monthly active users (MAUs) and has rewritten its narrative. What started as an artistic and visual forum for reaching a relative niche audience has transformed into a platform with massive reach and appeal—and an advertising opportunity that demands attention from brands of all sizes, in all industries.