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Why Instagram Stories Are Worth Your Creativity and Budget

Written by: Shane O'Neill, Director of Content

Facebook announced during its first-quarter earnings call in late April that over 500 million daily active people are using Instagram, Facebook and Messenger Stories. That’s up from 400 million in just June 2018. With such rapid scale comes exciting advertising opportunities, right?

In terms of producing innovative mobile ads, the answer is a resounding Yes. The ROAS (return on ad spend) picture, however, is not as clear yet. For Nanigans customers, the percentage of overall ad budgets going to Instagram Stories is still small (under 5%), with the large majority of Facebook/Instagram budgets going to newsfeed ads.

Nevertheless, the Stories format has been gaining one more little chunk of ad spend each quarter, proving it can perform at the same level as the Facebook and Instagram feeds. With lower-than-feed CPMs and a growing user base, we predict Stories’ budgets will keep rising.

What is clear is that the creative opportunities with Stories are unprecedented. Stories offer brands a unique chance to create a new breed of fun, loose mobile advertising. The “Stories Aesthetic” is forcing marketers to stop leaning on static images or repurposed TV commercials and consider the creative possibilities of producing ads that mesh with the Stories format and its users’ sensibilities.

Here are three reasons why Instagram Stories ads are worth your creativity and ad spend this year.

Stories offer creative freedom

Stories are where users present an unfiltered version of themselves using video snippets, selfies, graphics and text. They craft clever narratives with Stories and they expect Stories ads to do the same.

Conventional ads — airbrushed photos and slickly produced videos — stick out in a bad way among all the spur-of-the-moment, shot-on-my-smartphone Stories posts.

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This departure from conventional advertising should excite and inspire performance advertisers. But bear in mind the following when building out Stories creative:

Stories ads should resemble Stories posts

Six out of 10 Instagram users want unfiltered and authentic content from brands, according to eMarketer. That means movie trailer quality videos featuring actors jammed into a Stories stream are going scream, “ADVERTISING!”

Quirky images and video snippets with overlaid text will likely be more effective for a brand. People access Stories to see friends being spontaneous and brands need to fit in with this look and feel.

Peloton and Nike are good examples of brands successfully not trying too hard to be an ad.

Peleton Nike

Tell a story

With Stories, brands can utilize carousels and video — just as users do — to craft micro-narratives and make personal connections.

Wrigley's 5 Gum

We recommend dividing Instagram video ads into sections or chapters. Even if the ad is 10 – 15 seconds long, brands should incorporate quick cuts to move the story along. If you’re advertising a new shirt line in a 15-second Stories video ad, you could do quick cuts of the model wearing a new shirt every two seconds.

An Adweek story covering best practices for Stories creative spotlights Wrigley’s clever 10-second Stories ad (see left) that includes a 5-second countdown to two people kissing. The ad resulted in an 11% lift in sales for Wrigley’s.

Make the next steps crystal clear

Users are still figuring out how to engage with Stories ads, so brands should be extremely clear about what product they’re selling.

It’s common practice for brands to embed the words SWIPE UP in the ad with an arrow pointing at the CTA button. If you want Stories ads to generate conversions and sales, this is no time to be subtle with instructions.

Get vertical

Instagram offers three sizing formats: Square (1:1), Landscape (1.91:1), and Vertical (4:5). Choose wisely, but keep in mind that Stories were inspired by the “selfie” movement and most users shoot their Stories vertically.

Stories users’ eyes have been programmed to look top-to-bottom or bottom-to-top. “Swipe up” is usually the only action to take on a Stories ad. As a result, the visual in your Stories ad — whether it’s a sandwich or a model showing off a dress — should be shot/photographed/cropped as up-and-down, and not left-to-right.

Our guide, “Instagram Stories Ads: Good Creative vs. Bad Creative”, covers Stories advertising in more depth.

The returns on Stories can be fantastic

Kayla Itsines

I know, I know. I just wrote that the ROAS picture around Stories is unclear. And it’s true in most cases. But Nanigans customers that follow the proper creative guidelines for Stories ads have seen major increases in mobile app ROAS.

Australian fitness guru Kayla Itsines — and her mobile workout app, Sweat — was an early adopter of Instagram Stories ads (see right). During a targeted campaign in Dec. 2017 – Jan. 2018 that included Facebook video ads, Instagram Stories and Instagram link ads showing workout exercises, the Sweat app achieved:

  • 69% increase in mobile app ROAS
  • 2.2X increase in mobile purchases
  • 20% increase in paying app users

For more details, read the full case study on Kayla Itsines and the Sweat app

Some other brands seeing strong returns on Stories’ ads:

The Gap turned to Instagram Stories ads to build buzz around its “Logo Remix” line of shirts for millennials. The clothing retailer produced vibrant, full-screen carousel video ads featuring dance music and singer SZA.

The campaign resulted in:

  • 73% higher click-through rates than in its past Instagram ad runs
  • An ad recall of 17 points

Luxury fashion brand Michael Kors used Instagram Stories to target fashion-conscious shoppers for its stylish smartwatches. The carousel video ads featuring a model using the Michael Kors Access smartwatch to manage her schedule.

The campaign saw:

  • 3X higher CTR
  • 60% lower cost-per-click (CPC)
  • 20% higher online return on ad spend
  • 8-point lift in ad recall

Read more about how Gap, Michael Kors and other brands have succeeded with Instagram Stories ads

Stories is an underutilized ad channel … for now

Our performance advertising customers still dedicate the large majority of their ad spend to the Facebook and Instagram news feeds. At the same time, advertising on Stories hasn’t provided the ROI yet that advertisers crave. But to be fair, it’s still a young format at 2.5 years old!

The percentage of overall ad budgets among our customers going to Stories may be under 5%, but opportunities still abound on the format. A recent eMarketer report revealed that only 29% of advertisers are active on Instagram Stories. Because it’s still a relatively underutilized format, Instagram Stories CPMs are significantly lower than Facebook and Instagram feed CPMs.

Nanigans’ Facebook advertising benchmark report for Q1 2019 shows that average Stories’ CPMs among our customers for Q1 was $4.24, while non-Stories CPMs landed at $7.62.

However, the Stories’ role as an “underutilized” format may be short-lived. Stories CPMs, while still low, did increase by 89% year-over-year in Q1 among Nanigans’ customers, likely due to a steady increase in advertisers using the format. Additionally, the small share of ad spend going to Stories is growing each quarter.

As more and more advertisers transition from experimenting with Stories to dedicating significant ad budget to it, CPMs won’t stay low for long.

We’ll keep a close eye on Stories’ share of ad spend, costs and ROAS as the format evolves throughout the year.

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