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A Strong Start for Instagram Ads

Posted on 1.24.2016

Brand Networks, a provider of native social advertising and content marketing, released findings of a study that tracked a variety of metrics related to spend and performance throughout the second half of the year on Instagram and discovered that advertisers are, as expected, flocking to the platform and driving competition (and costs) particularly in the consumer package goods, fashion and retail verticals. 

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CPM (cost-per 1,000 impressions) surged with Instagram's opening of its API in Aug. 2015. Global average costs, in fact, grew from $5.21 in September to a peak of $7.20 in November, before coming down to $5.94 in December. 

"We anticipated that pent-up demand for programmatic, native advertising solutions on Instagram would drive rapid adoption and eventually scale," said Jamie Tedford, CEO and founder, Brand Networks. "However, the pace and scale of investment from our clients in key verticals exceeded our expectations dramatically. This year, we expect brands from a wider variety of industries will invest heavily on the platform, and experiment with a variety of ad formats -- especially video -- to stand out in the Instagram feed and reach valuable audiences. In addition to brand-building objectives, we're also enabling more testing with direct-response ads, as social media users become more accustomed to CTA buttons and more apt to engage in social commerce."

As Q4 progressed, according to Brand Networks, more advertisers experimented with video ad formats . Video ads as a percent of total ads served by Brand Networks jumped up from 9.54 percent in September to 22.52 percent in December, as advertisers raced to create and deliver compelling video content into the mobile feeds of Instagram users during the holidays.

"Video advertising on Instagram is rising to prominence incredibly quickly," said Tedford. "Over the past six months, we've learned that users are willing to increase their time spent interacting with a brand when shown a short video clip. This is a game changer for brands, as competition for eyeballs continues to increase on the platform. Brands who can offer this compelling video content stand out from the crowd and leave a lasting impression on the viewer."

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