Advertisers are using Instagram Stories to drive app downloads

For some advertisers, ads in Instagram Stories are now one of the top sources of revenue for their apps.

Flight-booking app Hopper is one of a raft of advertisers using the social network’s vertical video format as a way to acquire new users. Since it became possible to use Stories to drive mobile app installs last May, the advertiser has gradually used more of its media budget to do so. It’s at the point now that those ads are the only ones it buys in Stories now.

That outlay accounts for half of the advertiser’s total media spend, said head of user acquisition Simon Lejeune, who said the Stories format is key to driving traffic via swipe-ups.

App installs for Hopper on Instagram Stories grew by 67 percent on versus those ads the travel advertiser bought in the Facebook news feed, said Lejeune. Conversions were also three times more likely on the app install ads bought in Stories versus those in the feed, said the marketer. The post-view conversions for Hopper’s ads in Stories are also “higher” than those gained from in-feed ads, which shows “that people remember the ads they see in Stories because they’re not flicking through them in a feed,” said Lejeune.

The cost of those ads is relatively low despite the greater competition for ads. In August, for example, Hopper bought app install ads on cost-per-thousand of $5.53 versus the $4.62 price it had for the same ads in January. The advertiser bids based on return on investment, said Lejeune, so the CPM Hopper gets is a result of how much it’s ready to pay.

Social learning app Busuu, has been able to buy its app install ads on a cost per impression that’s 40 percent lower compared to feed placements. Proportionately, view-through installs from Stories are up to three times higher than other placements, though this doesn’t come as a particular surprise given the placement being more video-focused, said the app’s paid social manager Jon Beazley.

“From our experience, Stories don’t need to be over-reliant on view-through conversions,” said Beazley. “Despite running predominantly video creatives which lend themselves very well to view-through, we see lower CPIs than feed placements, even when only considering click-through conversions.”

It’s a similar story at M&C Saatchi Performance, which sees ads in Stories driving on average three times higher install volumes for clients than in the Instagram feed at typically 20 percent lower CPIs, said the agency’s manager of biddable media Faye Nash. Furthermore, those ads appear to be driving more efficient CPAs for post-install conversions, said Nash.

That there are more advertisers like Hopper and Busuu using Stories to do more than raise awareness shows how far quickly the format is maturing. The likes of Smirnoff and Stella Artois weren’t sure the format could hit specific objectives such as installing an app or visiting a site and so opted to test free posts this year rather than buy the ads within them. Now, Smirnoff is weighing how much it can use influencers to hit more performance-oriented goals.

“For app advertisers, Instagram Stories has become a direct revenue driver,” said Christine Goos, a strategist at advertising automation platform’s Creative Studio team, who has helped both Hopper and Busuu drive app downloads on Instagram Stories. “Those advertisers that don’t have an app are mainly buying ads in Stories to drive upper-funnel goals. The money paying for those ads isn’t an additional budget. Instead, advertisers are reallocating money within their paid social budgets so that they can spend more on Stories.”

The observation reflects the rapid rise of Instagram Stories. Stories were growing 15 times faster than feeds earlier this year, said Facebook CEO Mark Zuckerberg, who expects the format to overtake posts in the feed as the main way people share across its apps. Data suggests that many users already prefer Instagram stories to feed content on either Facebook or Instagram, so it’s only natural that advertisers are seeing their call to actions perform better on this format.

And yet the ephemerality of Instagram Stories — posts last just 24 hours unless saved as a Highlight video — is the format’s biggest challenge to performance advertisers, particularly those like Hopper and Busuu that are using it to convince people to download their apps.

When Busuu first tested the format, for example, it took a few attempts to get the creative right, said Beazley. The app quickly found that grasping a user’s attention in the initial seconds was a major factor in the success of the creatives and the placement as a whole. This led the advertiser to produce ads that were quite different to what it ran in the feed earlier this year, which were much snappier, faster-paced videos.

More in Media

NewFronts Briefing: Samsung, Condé Nast, Roku focus presentations on new ad formats and category-specific inventory

Day two of IAB’s NewFronts featured presentations from Samsung, Condé Nast and Roku, highlighting new partnerships, ad formats and inventory, as well as new AI capabilities.

The Athletic to raise ad prices as it paces to hit 3 million newsletter subscribers

The New York Times’ sports site The Athletic is about to hit 3 million total newsletter subscribers. It plans to raise ad prices as as a result of this nearly 20% year over year increase.

NewFronts Briefing: Google, Vizio and news publishers pitch marketers with new ad offerings and range of content categories

Day one of the 2024 IAB NewFronts featured presentations from Google and Vizio, as well as a spotlight on news publishers.