Instagram touts user engagement, brand success on Stories as Snap tumbles
- One year after launch, Instagram is boasting solid numbers for its video messaging Stories feature, according to MediaPost Communications. Instagram Stories, largely viewed as the app's answer to Snapchat, now has 250 million daily active users (DAUs) — Snapchat had 166 million DAUs at last tally — and has added 20 features over the past year such as stickers and Boomerang.
- Businesses are also quickly adopting Stories, with more than 50% of brands on Instagram posting a Story in the last month and those posts leading to audience engagement, the platform said. Instagram reported 20% of organic Stories from businesses lead to at least one direct message. Instagram overall says it's seeing healthy engagement, with users under 25-years-old spending an average of more than 32 minutes a day on the platform and users 25-and-older spending over 25 minutes per day, according to Recode, making for the first time in nearly three years that the platform has released that kind of data.
- While Instagram is riding high, Snapchat parent company Snap Inc. had another round of bad news with TechCrunch reporting its stock price hit a record low level after a 4% drop Tuesday. The lockup expiration that kept insiders from selling shares passed but, more significantly, new rules for the S&P 500 around multiple share class structures means Snap is ineligible for the popular index.
While Instagram Stories was created as parent company Facebook's bid to replicate the Snapchat user experience, it's quickly become the preferred platform for many marketers, influencers and even users. Its success has been bolstered by the rollout of a variety of products, along with the integration of Facebook data in Instagram users' feed algorithm and a more curated experience with personalized Stories suggestions.
Instagram only recently began monetizing Stories, rolling out full-screen ads globally in March, but major brands are already seeing strong uses for the feature. On Facebook's Q2 earnings call last week, COO Sherly Sandberg highlighted a case study where famed ice cream maker Ben & Jerry's ran an awareness campaign via Stories, seeing a 14-point lift in ad recall and a 2-point lift in purchase intent for a new product. Instagram is a strong contributor to parent company Facebook's bottom line, with eMarketer data cited by MediaPost forecasting it will make up 20% of Facebook's domestic mobile revenue this year, up from 15% last year.
Snapchat, in the meantime, is having a rough go of it following an initial public stock offering in March, seeing its stock downgraded by one of its lead underwriters, Morgan Stanely, which cited a failure to innovate. Being rejected from the S&P 500 only puts the platform in a more precarious situation. Snap is expected to report its Q2 earnings on Aug. 10 after market close.