Instagram Stories is growing fast. It's been five months since everyone’s favorite little photo-centric social network copied, er, launched the feature, which lets you group Instagrams into cohesive stories that disappear after 24 hours. Since then, the app has amassed 150 million daily users. That’s up from the 100 million daily users Instagram announced back in October—and right in line with the last known number of daily users we’ve heard from Snap. So, what do you do when you have so many eyes trained on your app? You monetize.
Instagram today announced its first-ever ad for Instagram Stories, and it sounds rather familiar to anyone who pays attention to how Snap ads work. The ad takes up your mobile device’s full screen, and it only shows up between Stories—not in between media or inside stories, which is a different tack from the one Instagram parent company Facebook may reportedly be taking with video ads for its News Feed product. The ads for Stories are launching as a test for now with 30 advertisers, including Capital One, General Motors, and Nike—though Instagram says a global rollout will happen "in the coming weeks." One-third of Instagram’s most-watched Stories originate from the 1.5 million businesses on the platform, and 70 percent of Instagrammers already follow a business on the social platform, says Vishal Shah, Instagram’s manager for business and advertising products. Ads within stories is a natural next step, Shah says.
Not least because ads are what Facebook does. The compay has 1.79 billion monthly active users who share a wealth of personal information about who they are, where they live, and their likes and dislikes with the social network. Many of those Facebook users are on Instagram, too. Instagram’s pitch is that advertisers can take advantage of the same great Facebook data to tailor an ad to an Instagram Stories viewer.
“We think of the ad product as being a combination of the format and the backend that helps power the ad product,” Shah says. “Our underlying infrastructure is a shared backend infrastructure between Facebook and Instagram.”
Instagram says it will also share data with businesses using these Stories ads to gauge how well they're spending their money. Advertisers will get a look at impressions—how many times viewers have looked at an ad, even if they don't stick around—as well as replies and exits (which ads are driving viewers away). Third parties, however, won't verify these insights the way they do other Facebook ads. Right now the ads themselves don't do much, but Shah says they may eventually include ways to swipe up to land at a website or install an app.
And so the race between Instagram and Snap continues, especially as talk of a Snap IPO heats up. Now that Instagram has seemingly matched Snap in the audience game, why miss the opportunity to go after some paying customers, too?
