Instagram adds advertising to ‘Stories’

Tim Baysinger -

Facebook Inc’s Instagram is bringing more than 30 advertisers into one of its fastest-growing features, Instagram Stories, in a bid to boost advertising revenue, the company said.

The social media company will become a more important 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 can place in front of users, which had been one of the key factors 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 Noah Mallin, head of social for ad agency MEC Wavemaker. In Instagram Stories, users and businesses can post a string of photos and videos that disappear after 24 hours.

It launched in August and now has 150 million daily active users, according to Jim Squires, director of market operations for Instagram.

The new ad product will show full-screen ads intermittently as users swipe through photos and videos on Instagram Stories.

The company is testing it with major advertisers including 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 for cable network TNT’s airing of next month’s National Basketball Association All-Star Game in New Orleans.

Companies normally test new advertising products with a select group of advertisers to work out any kinks before a wide roll out.

According to eMarketer, 74 per cent of US companies plan to use Instagram this year, up from 53 per cent who used it for marketing in 2016. This level of use would allow Instagram to surpass Twitter.

“It’s definitely gained importance,” said Ian Schafer, founder and chairman of ad agency Deep Focus, who said he plans to spend more money with Instagram.