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Back to Blog

Your Instagram Advertising Questions from the Q3 2018 Quarterly Trends Webinar Answered!

Chris "Coz" Costello, Senior Director of Marketing Research @ Skai™

October  24, 2018

Marketers had lots of questions about Instagram advertising during our recent Q3 2018 Quarterly Trends webinar and Skai’s Senior Director of Marketing Research, Chris Costello, has the answers.

500 billion impressions. 14 billion clicks. $6 billion (USD) in advertiser spending via Skai’s direct integrations with the biggest publishers in the world (Google, Bing, Pinterest, Snapchat, Facebook, Instagram, and others).

That’s just part of the massive dataset we recently pored through to pull together our Q3 2018 Quarterly Trend Report. This report is full of critical insights for marketers, whether it comes from our infographic containing all the high-level data, or the webinar we host each quarter to walk through some of the potential whys and hows behind the numbers.

During the Q&A portion of the webinar, advertisers had lots of great questions on a wide range of topics, but the one area they kept coming back to was Instagram advertising and the “Stories” ad format. Since many of you may be wondering the same things, we’ve pulled together the top questions and answers here to share these insights with you.

Q. What percentage of Skai clients that are spending on Instagram ads are also spending on Instagram Stories ads? What are the impediments to those that are not?

Across all Skai advertisers in Q3 2018, just under half (49%) of advertisers who were active with Instagram ads were also spending ad dollars on Instagram Stories. Of those, 27% spent more than 25% of their total Instagram investment on Stories (compared to Feed).

More than anything, we’re just seeing that digital ad budgets take some time to propagate into new areas. There has been some concern that optimizing ad content for the Stories format may take additional cycles for creative teams, but that’s been more anecdotal.

Q. How do you calculate the click-through rate (CTR) for Instagram Stories ads? Does it have to involve an interaction with the ad unit or does a completed view also count?

To answer this, let’s first define a “click”. The definition of a click does have to involve an interaction with the ad unit, as per one of these actions:

  • Link clicks
  • Post likes, comments or shares
  • Clicks to a Facebook Page or Instagram profile
  • Clicks to expand a photo or video to full screen

A completed view may certainly be considered a KPI for these ads, but it is not considered a “click,” by definition. The broader answer here is that not all KPIs work for all ad types.

Q. Do you expect CTR on Instagram to improve toward core Facebook over time or is it structurally lower for some reason?

Both. There is definitely a structural reason why Instagram ads have an overall lower CTR than other Facebook ads, and that has to do with the fact that it is frequently a more passive user experience, similar to how video ads have traditionally worked across the entire Facebook ecosystem. In fact, Instagram ads often are explicitly video ads, so it makes sense that they behave the same way.

However, there are also more engagement-driven ad types — most notably the carousel versions of Dynamic Ads (for Products, Travel, Auto, and Real Estate) — that are making their way over to Instagram. As the prominence of these ads increases on Instagram, particularly in this high-CTR Carousel format, we will see at least some convergence between Facebook and Instagram click-through rates.

We measure click-through rate mostly because it’s convenient, and as ad types become more diverse, we have to think more about why CTR may be different for one format versus another rather than using it as an absolute yardstick of ad quality. Video ads are again the model here. Advertisers can show video ads, then build an audience around viewers of those ads and retarget them with ad types that drive more clicks. The lack of clicks on video ads, in this case, is largely irrelevant.

Q. Are advertisers interested in Instagram shopping? Could this be a driver away from a branding to direct response?

There is very little concrete information available around Instagram shopping, but if it does remove points of friction in the checkout process for products seen in Instagram ads, then we would definitely expect advertisers to show interest.

Q, How are Stories monetizing on core Facebook relative to newsfeed? What more needs to be done to improve the monetization of Stories?

Facebook stories only went into general release in early October, so there is currently no performance data available. However, if Instagram is an example of how this will work on core Facebook, marketers will have to consider the impact of Stories ads on other, more response-driven ads in their programs and value Stories based on how much they can expand audiences that other formats can then convert.

These ads are going to be more about activating demand from potential customers, so my feeling is that looking to justify price increases based on direct ROI calculations is the wrong way to approach the issue.

Q. Are you seeing Facebook shift inventory away from feed to stories? What are the relative CPCs and CTRs for feed vs stories?

Again, Facebook Stories Ads are brand new, so we’re not really seeing anything yet. CPM (CPC is not a useful comparative metric for social, at least within the Skai data ecosystem) and CTR for Instagram Stories compared to Instagram Feed, however, shows lower values for both, although they both increased from Q2 to Q3.

We hope this helps answer some of your questions about Instagram advertising. But if you still have some, we’d love to talk. Your Skai rep is always available to dig into your toughest marketing challenge. And if you’re not a current client, contact us for a demo today!

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