Facebook’s plan to make more money off of Instagram is apparently working. According to a recent report from Facebook marketing partner Nanigans the the social media giant is already seeing rapid growth in ad spend on the Instagram Stories platform.
“Over the past year, advertisers leveraging Stories have increased budgets dedicated to the format at 124%,” the report says as quoted in a note from Deutsche Bank. “Make no mistake, News Feed (non-Stories) ads are still king, with a vast majority of ad spend among Nanigans customers going to these ads. However, the Stories format is quickly emerging as an ad placement that can perform in the same league as other ad units within the Facebook ecosystem.”
Mark Zuckerberg said during Facebook’s third-quarter earnings call that Stories has great potential for increasing revenue. This at a time when the company was still strategizing the best way to monetize Stories while at the same time educating brands on how to best create effective ads for the platform.
“Make no mistake, News Feed (non-Stories) ads are still king, with a vast majority of ad spend among Nanigans customers going to these ads,” Deutsche Bank analysts wrote. But “the Stories format is quickly emerging as an ad placement that can perform in the same league as other ad units within the Facebook ecosystem.”
Not all analysts see such a rosy picture, however, with some warning that the growth could slow because most of the ad revenue comes from smaller marketers who still need time to acclimate their marketing strategy to the Stories format.
Nanigans itself also noted that changes in its methodology for “tracking spending across multiple geographies” could be a factor adding that the data “should not be compared with prior reports and may not necessarily be a proxy for trends in the overall Facebook advertising marketplace.”
For now, the story on Stories is a wait and see.
Deutsche Bank has said that it expects Facebook ad revenue growth to decelerate in the fourth quarter of 2018 as well as the first quarter of 2019, then see stability in the following quarter, reports MSNBC. Deutsche Bank has set a $195 price target on Facebook.