It’s no secret that Instagram has been one of the fastest growing recipients of digital ad dollars. Looking at how same-advertiser performance shook out in Q4 across Tinuiti clients, it’s clear Q4 was no different.

The following is based on anonymous samples derived from Tinuiti’s client base, which constitutes the largest assembly of ad spend under management across Facebook, Google and Amazon of any independent performance digital marketing agency in the world.

Instagram Spend Grows 50% Y/Y in Q4 2019

Looking at Y/Y growth by quarter for 2019, Instagram spend increased by at least 50% every quarter and grew by exactly 50% in Q4 2019, the same figure observed in Q2.

 

 

While spend growth has remained strong, the driver of that growth shifted more towards increases in pricing throughout 2019. In Q1 2019, impressions soared 73% while CPM actually declined 13%. By Q4 2019, impression growth had slowed to 19% while CPM increased 26% Y/Y for the quarter. While it used to be the case that a meaningful share of Facebook advertisers wasn’t actively investing in Instagram, that gap in adoption has steadily closed, increasing competition for inventory on the platform.

Stories Now Account for Over 1/3 of All Instagram Investment

The biggest driver of growth on Instagram over the past year came from ads featured in Stories. These units went from accounting for 13% of Instagram ad spend in Q1 2019 to 37% in Q4.

 

 

CPM for Stories ads remains significantly below that of ads featured in the feed, and in Q4 2019 the disparity was 34% for the median advertiser targeting both placements. However, this is largely due to the difference in click-through rate, which was 36% lower for Stories than feed ads for the quarter, such that CPC for the two placements is nearly identical.

 

 

Explore Ads Still Small for Now, but Have Potential

Instagram introduced ads to the Explore tab in June 2019, adding a new source of inventory for advertisers to…ahem…explore. By Q4 most advertisers were advertising on the Explore tab to some extent, though it accounted for just 1% of Instagram spend in total for the quarter. That said, some advertisers allocated more than 5% of Instagram spend to Explore ads, and the placement has potential to help continue driving Instagram growth forward in the same way Stories ads have over the past few quarters.

At present, Explore inventory CPM and CPC are both more than 50% below that of feed placements for the median advertiser targeting both placements. While Explore ads do have a lower CTR than those featured in the feed, the difference is far less pronounced than in the case of Stories ads.

 

 

As more advertisers expand targeting to take advantage of Explore tab inventory, thereby increasing competition, we expect these differences in pricing to contract.

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