After almost 9 months from the launch of Instagram ads, reliable performance data is now becoming available from several sources and the picture emerging is of another winner, albeit with some shadows.
But let’s start from the good news 2015 was the year of Instagram and the numbers confirm it. According to the social media inflation index calculated by Trackmaven analyzing a sample of 26,965 brands across all industries, Instagram has outperformed all the social networks with an average followers’ growth of 7%.
More good news for Instagram
E-marketer forecasts that after the introduction of advertising Instagram’s revenues should reach $2.81 billions by 2017, which corresponds to a 500% increase form its launch in September 2015.
A look at CPM and formats
A recent report by Brand Networks on the aggregate data from their customers’ Instagram campaigns gives us a closer look to the actual performance of the social network in terms of advertising.
Predictable:
Unsurprisingly, since October 2015 the growth of impressions has been staggering, and clearly Instagram advertisers have been able to make the most of the Holidays season when monthly impressions have reached almost 700 millions.
Surprise:
After the initial surge at a daily average above $15 CPM last September, the rate has stabilized around $6CPM, while the monthly data highlights the peak of the Holiday season advertising in November.
The six months benchmark analysis of CPM by industry reveals some obvious trends and some surprises.
As expected, fashion is by far the most competitive, and therefore expensive, vertical, although according to the research to the higher cost corresponds also a higher engagement rate. Organizations have also paid dearly for their ads on Instagram, more than retail and CPG.
Retail appears to have been a conservative adopter of Instagram ads, on the other hand the CPM for this vertical has not decreased after the Holidays, indicating a sustained positive trend.
As regards ad formats during the last trimester of 2015 videos and photos have accounted for almost the same amount of monthly views, but photo continues to be the most convenient in terms of CPE, i.e.: $1.40 vs. $3.22 for retail.
And the bad news …
Now let’s see the not-so-good news. Since the end of last years bells have been ringing about the lower rate of engagement by Instagram users. The data presented by a recent survey of 10,000 Instagram accounts by Quintly has revealed a drop of 40% in user interactions. There are multiple reasons for this drop, from the fact that timelines are getting crowded to the increasing presence of advertising and the recent optimization tweaks to the feed algorithm.
Undoubtedly this channel is reaching its maturity and this year we will see how it will manage to balance all these factors, also vis-à-vis the strong growth of a rival such a Snapchat.
Illustration from Freepik