Does it feel like you’re seeing a lot more ads on Instagram as of late? The Facebook-owned social network is rapidly increasing the number of ads it serves each month, according to a report from Brand Networks. Brand Networks an ad network that handles social advertising for major brands like American Express and AT&T.
The numbers show that Brand Network alone garnered 50 million ad impressions on Instagram in August, 100 million ad impressions September, and 670 million ad impressions December. Even though these numbers are just from one ad network, that fact that its ad impressions grew 13 times over a 5 month period is significant.
Usually an increase like this would cause the ads to lower in value. Not the case with Instagram, as advertisers are still paying the same (or more) for ads shown on the social network. According to the report, Instagram’s cost-per-1000 ads served has never gone down since increasing the distribution of ads. In fact, cost went up briefly before levelling off to where it was before.
While Brand Networks’ report paints a positive picture for Instagram in terms of ad revenue, it loses sight of the company’s most valuable asset: it’s users.
How do the people using Instagram each day feel about seeing more ads in their feed? My initial thought is that serving more ads increases the risk of annoying people to the point using the Instagram less frequently.
Instagram has to find a delicate balance between keeping advertisers happy, and keeping its users happy. Instagram hasn’t reported on its daily active user count since September last year, around the same time it started to ramp up the number of ads served each month.
We’ll see when the next set of numbers come out whether or not the increase in ads has had any negative effect on user growth.