Dive Brief:
- Sensor Tower research uncovered that 45% of Instagram’s more than 200,000 advertisers received venture capital funding the past year, according to Adweek.
- For parent company Facebook, 25% of its top 20 advertisers received VC cash.
- Both data points indicate that startup companies including gaming and shopping apps are actively advertising on the social media platforms.
Dive Insight:
In fact, game apps made up about 30% of Instagram advertising, and shopping accounted for 20%. Adweek reported social networking, lifestyle, finance, and health and fitness categories each generated less than a 10% share of voice score. The research also found that video ads are growing on Facebook with a 35% to 65% split between video and photo ad impressions in March, compared to a 25% to 75% split for the same formats in January.
Advertising on Instagram has been a boost to Facebook’s considerable bottom line. Last week, Bloomberg that Credit Suisse Group AG predicts Instagram will contribute $3.2 billion in revenue to Facebook this year, tripling the price Facebook paid for the social media platform in 2012. Meanwhile, Facebook announced earnings Wednesday that clobbered expectations and disclosed that advertising revenue has spiked more than 50% year-over-year and that mobile ads now account for 82% of overall ad revenues. The results also revealed a spike in user growth. Facebook now sits at 1.65 billion monthly active users, while Instagram crossed the 400 million mark last fall.
"We are in the beginning of a golden age of online video," Facebook CEO Mark Zuckerberg said in a statement at the time of the earnings announcement. With rosy results like these and a only signs of continued user growth, brands can expect Facebook to continue pushing out innovative video ad products on both its namesake app as well as Instagram.
