Instagram’s Getting Meaningful Ad Spend Relative to Facebook

July 27, 2018

This article is included in these additional categories:

Advertising Trends | Digital | Social Media | Spending & Spenders

Instagram’s catching up to Facebook in daily usage, and it’s slowly making its way on the advertising front, too. Merkle’s latest quarterly Digital Marketing Report (DMR) [download page], covering Q2 activity by its clients, reveals that the median advertiser spent almost one-quarter (23%) as much on Instagram ads as on Facebook.

That’s a considerable jump from Q1, when the median advertiser spent only 9% as much on Instagram as on Facebook. (With Facebook stock prices tumbling after its latest earning report showing stagnant user growth, Instagram seems to be the growth vehicle now.)

Large advertisers may be tipping the scales even more to Instagram, according to recent research from Marin Software. Its estimates (primarily from large advertisers) suggest that Facebook-owned properties hog 59.9% of social ad budgets, with 41.3% dedicated to Facebook and 16.3% to Instagram. (That would put Instagram spend at close to 40% of Facebook spend.)

Returning to Merkle’s report, the data shows that advertisers that have been investing in Instagram ads since Q2 2017 hiked their budgets in Q2 2018 by 177% year-over-year. The analysts note that “given the same-client nature, these figures do not reflect the expansion in the number of brands adopting Instagram as part of their paid social programs over the last year.”

How many such brands? Instagram in September 2017 reported 2 million monthly advertisers, doubling the number from just 6 months earlier! Survey research also confirms that many social media marketers are planning to increase their spending on Instagram ads this year.

There are many reasons for these increased investments: Instagram is a beloved platform with growing brand value, and is perceived by teens – a key demographic for advertisers – to be the best marketing channel to reach them.

Meanwhile, there’s another platform that’s seeing similar trends to Instagram: YouTube. Merkle’s report indicates that brands investing on YouTube have increased their spend on the platform by 189% year-over-year. Impression growth on YouTube (+225%) was also similar to that on Instagram (+209%), with CPM trends likewise almost on par (-11% on YouTube; -10% on Instagram).

There is one advantage that Instagram might have over YouTube, though. In a report released late last year, Forrester Research found that while 39% of teen YouTube users felt that the platform has too many ads, only 11% of teen Instagram users felt the same way about its ad loads…

The Merkle report is available for download here.

Chart-Library-Ad-1

Explore More Articles.

Marketing Charts Logo

Stay on the cutting edge of marketing.

Sign up for our free newsletter.

You have Successfully Subscribed!

Pin It on Pinterest

Share This