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Instagram CPM is still lower than Facebook, but not by much: report

Instagram?s ad product is still relatively nascent, but a recent report from Nanigans proves that brands are growing fond of its development under the aegis of parent company, Facebook. 

The company?s Instagram Advertising Performance Snapshot for this month uses a few case studies to illustrate that Instagram should be an essential component of any marketer?s ad spend. Many of the brands featured in Nanigan?s report experienced significant ROI from their efforts on Instagram, but nonetheless the study should not be seen as a blanket recommendation of unqualified investment across all sectors.

?In the case of Facebook and Instagram, we always recommend advertisers utilize and test across both channels to maximize their efforts,? said Andrew Waber, manager of market insights at Nanigans, ?But to be clear, there isn?t one ?right? budget percentage to allocate to each ? it?s going to vary based on who you are trying to reach and the respective user behavior. 

?Proper A/B testing is a must to reveal these nuances.?

Instagram Ads
Nanigans? report claims that in many ways, ?Instagram has become an ideal platform for performance marketing,? and describes its direct response ad products ? including video and carousel ad formats ? as unique in their ability to provide a compelling ?creative canvas? for brands and marketers to work upon.


The report describes Instagram as an especially potent platform to drive more and higher value purchases through advertising. In a case study, Nanigans presented two brands and their successes in ecommerce through a dedicated ad spend on Instagram. 

One brand managed an 11 percent increase in average order value year-over-year in Q4, a 153 percent increase in purchase rates, and even managed a 373 percent increase in return on ad spend. Another managed increases of 12 percent, 209 percent and 218 percent, respectively. 

Average CPM
Cost per mille on Instagram still remains down compared to parent company Facebook, and the former also sees a lower clickthrough rate, possibly due to differences in user experience between the two platforms.

?There is now a lot of overlap between Facebook and Instagram ad products,? Mr. Waber said. ?Dynamic ads, carousel, video and photo ads can be run on both platforms, for instance. 

?But the main difference for advertisers is how you think about creative, as Instagram is such a visual platform, and is exclusively mobile.?


Not all brands have been flocking to Instagram: Considering that the consumer packaged goods sector is one of the most heavily scrutinized marketing arenas, the findings of a new L2 report ? which claims that only 41 percent of CPG brands adopted Instagram in 2016 ? spell trouble for the sector and its brands, which rely heavily on loyalty to compete (see story). 

?While we don?t work with CPG advertisers, our base of leading ecommerce companies have seen increasing success driving sales on Instagram,? Mr. Waber said. ?In general, we?ve found just about any advertiser can achieve strong ROAS on Instagram, given the right tools and testing strategy.?