Instagram gets serious on ads: Best practices and early performance data revealed

Liz Morrell is a freelance business journalist and content creator with more than 20 years writing experience, including 15 in retail and associated sectors. She is a regular contributor to MarketingTech but also covers a number of other industries in her freelance capacity. Contact her via LinkedIn or at


In the week that Instagram announced the rollout of ad functionality on its platform across the globe by the end of this month, agile marketing software provider Kenshoo has revealed what it says is best practice about what works on the platform in terms of advertising.

The company has analysed 25 active campaigns managed through its technology on Instagram to provide campaign measurements and learnings that it believes will help advertisers better target campaigns on the platform.

The performance data gathered through the study reveals some interesting facts about the use of Instagram for advertisers with click through rates higher than social advertising industry averages. “It’s obviously early days in the life of Instagram advertising but the initial performance indicators show there is good potential – for example with CTRs around two and half times that of the industry average for social ads,” said David Zelniker, product manager at Kenshoo.

Kenshoo’s study suggested that the cost per install (CPI) for the platform was $6.30 with average click through rates (CTR) of 2.48%. This works out at an average cost per click (CPC) of $0.51 and an average cost per thousand (CPM) of $6.70.

Zelniker said the research had also revealed a number of best practices that successful advertisers should emulate. Unsurprisingly Kenshoo found a necessity for compelling and unique content for ad copy and creative on the Instagram platform. “This makes sense because of the audience’s focus on the visual, meaning ads need to be visually appealing and use high-level creative,” said Zelniker. “Ads created for other social platforms may not translate well to Instagram. So auto-importing ads from Facebook campaigns doesn’t cut it, especially as they’re different sizes anyway,” he added.

However he said that some functionality could be imported such as using Facebook targeting parameters such as Lookalike Audiences, which create lists of Facebook users who share similar interests and demographics to existing targets – were effective in driving ad engagements.

Zelniker said Instagram was likely to prove an exciting new route for advertisers to reach potential customers, despite the doubt of some over whether it will work in the Instagram environment. “CPM is still low compared with other social platforms, so there is an opportunity for early Instagram advertisers. But this could change as the program expands and competition increases,” he said.

However he warned potential advertisers to get ready for growth. “It’s going to be important for Instagram advertisers to be prepared to invest time and resources to testing and optimising their ads and ad targeting based on performance data to help them learn what works and what doesn’t work on the platform,” he said.

Instagram ad revenue is projected to reach $1.5 billion in 2016, according to research firm eMarketer and nearly double by 2017 to $2.8 billion. 


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