While Instagram introduced ads in Stories just two years back, Nomura analyst Mark Kelley says that brands are quickly transitioning to the format and he predicts that it will generate as much as $2 billion in revenue for Facebook this year. A number that Kelly said could grow to as much as $7.5 billion by 2021.
Both numbers are an impressive jump from an estimated $750 million last year for Instagram Stories, while Snap, which is the originator of the “stories” type feature, will see its revenue come in at around $1.5 billion in 2019.
In the recent research note Kelley said the growth of stories marks a transition from News Feed – and it’s happening more quickly than expected he said.
Both Twitter and Snap have had trouble maximizing advertising revenue, while Facebook, said Kelley has a bright future with its Instagram and WhatsApp platforms transitioning to a Stories-based model.
“The transition to Stories is occurring at a much faster rate than we initially anticipated,” Kelley wrote, adding that, “We’ve also heard anecdotally from advertisers that budgets continue to grow at the corporate level, with spend being reallocated to Stories rather than Feed, and early feedback has been positive.”
As of the fourth quarter of 2018, Instagram Stories had 500 million daily active users and WhatsApp Stories had more than 450 million. At the end of 2018, more than 2 million advertisers were using Instagram Stories ads.
Facebook has yet to significantly monetized WhatsApp Stories just yet, leaving another massive growth opportunity.