Is Instagram Approaching Ad Glut?

Whether its users like it or not, Instagram has gotten very cozy with Madison Avenue and the broader business community. In the past six months, in fact, the social network has more than doubled its ad base to roughly half a million brands.

Since ads launched in September of last year, users have taken more than a 1 billion related “actions -- like clicking or otherwise engaging with an ad. James Quarles, VP of monetization at Instagram, says the numbers should speak for themselves. 

“We’re proving that Instagram is a place where inspiration sparks meaningful action for businesses, from finding new customers to driving sales,” Quarles stated.

Two months after launching its Business Tools service, Instagram has seen more than 1.5 million businesses convert to a business profile.

What types of ads are performing well on the platform? In the third quarter of this year, the top five verticals included CPG, e-commerce, retail, entertainment, and technology.



Going beyond mobile, meanwhile, Quarles and his colleagues said the value of Instagram’s ads now contribute to a 2% lift in offline sales. Of course, Instagram risks turning off users with all this advertising. So far, however, the Facebook unit seems to be achieving a tolerable content-to-ad ratio.

Despite the rise of Snapchat, in fact, Instagram continues to post impressive usership figures. The network’s monthly user base more than doubled over the past two years, and it added its last 100 million active users faster than the previous 100 million.

On average, Instagram now sees about 95 million photos and videos shared per day, and about 4.2 billion "likes” per day.

This column was previously published in Moblog on September 22, 2016.
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