Facebook Inc. owned Instagram is bringing more than 30 advertisers into one of its fastest-growing features, Instagram Stories, in an offer to boost advertising revenue, the Social Media giant announced.
The social media company will become a more vital player in maintaining Facebook’s growth in advertising revenue in 2017. During the last two earnings calls, Facebook executives said they may soon reach a limit on the amount of ads they put before users, which had been one of the key element driving ad revenue growth.
Media buyers are optimistic about Instagram’s ability to maintain Facebook’s place, second only to Alphabet Inc’s Google, in the digital ad marketplace. “Instagram could end up being as strong a revenue component for Facebook as YouTube has been for Google,” said head of Social for North America ad agency MEC, Noah Mallin.
In Instagram Stories, users and organizations can post a series of photos and videos that disappear after 24 hours. It was launched in August last year and now has 150 million daily active users, according to Jim Squires, director of market operations of Instagram.
The new ad feature will show full-screen ads intermittently as user swipe through photos and videos on Instagram Stories. The social media company is testing it with major advertisers which includes General Motors Co, Nike Inc and Airbnb, which is using it to promote its product Trips on Airbnb.
Time Warner Inc’s Turner Sports will test ads and promotions for cable network TNT’s airing of next month’s National Basketball Association All-Star Game in New Orleans.
Organizations normally test new advertising products with a selected group of advertisers to work out any loopholes before a wide roll out.
The past couple of months have seen Facebook admit to a variety of errors in how it has measured performance for brands that advertise on its platform. Buyers do not expect that to hurt Instagram’s efforts.
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Sameeksha Bhardwaj, From ITvoir News Desk