Publishers Aren’t Seeing Revenue From Instagram’s New Ads: Any media company can set up an advertisement on Instagram’s story platform. But is it worth it? It’s possible these ads may work in the future, but right now many media companies aren’t seeing the returns they’d like.
For publishers Instagram Stories are, for now, the anti-Discover.
Unlike Snapchat’s ultra -exclusive Discover platform, which is limited to a few dozen partners who commit to creating unique content on a daily basis, any media company can set up an Instagram Stories account.
And while Snapchat’s partners get a piece of the ad revenue generated on their Discover channels, publishers as of now are not getting any revenue cut from Instagram Stories, which just rolled out its first advertising on Wednesday.
Most publishers told CMO Today they are patient, as they expect Instagram to eventually share ad revenue or create some other form of ad revenue for Stories.
A spokeswoman for Instagram, which is owned by Facebook Inc., said the company has no comment on how the Stories business model may evolve.
In the meantime, publishers see a growing opportunity to weave marketers’ messages into their Story content. Currently, publishers are permitted to charge marketers for this “sponsored content” and keep all the revenue.
The new Instagram Stories ads sold by Instagram are very Snapchat like: the placements are full screen vertical videos that can run for 15-seconds, or static photos that run for five seconds. The charter list of advertisers includes L’Oreal, Bacardi, McDonald’s and Wendy’s, Instagram said.
To be sure, Instagram only launched the Stories product last summer, and only so many publishers have committed to regularly creating content for the service. That content ranges from an occasional behind-the-scenes image from a photoshoot to snippets of interviews with celebrities, like the ones recently posted by by Entertainment Weekly on Alec Baldwin and the cast of ABC’s “Blackish.”
Instagram said Wednesday that Stories now reaches an astonishing 150 million people a day (the same number that use Snapchat on a daily basis).
James Quarles, vice president of Instagram Business, said that one third of the most-viewed Stories to date come from businesses, including media companies.