Since it snapped up Instagram for $715 million in 2012, Facebook has been tight-lipped about the photo-sharing platform’s performance. Now Bloomberg reports that last year the app raked in $20 billion in ad sales—making up more than a quarter of Facebook’s total revenues.

FB will neither confirm nor deny that figure…

…but plenty of advertisers are less than shocked. As Adweek details, there are plenty of reasons behind Instagram’s reign.

  • It’s about quality, not quantity. FB boasts 2.5 billion active users each month. IG has a mere 1 billion. But many brands are targeting younger audiences, which are more likely to hang out on IG. And anyway, global user growth is on the upward swing and, perhaps more importantly, so too is the amount of time users spend in their Feeds.
  • And speaking of targeting, IG has fantastic targeting capabilities. The platform makes it easy to optimize ad formats to both Feed and Stories.
  • And check out the Checkout. Though the feature is still relatively new, the ability for users to make in-app purchases has been a boon to D2C brands trying to establish legitimacy. As consumers get more comfortable shopping this way, Checkout will become increasingly important.
  • But advertising on IG has gotten competitive. The cost/1K views has gone up while viewability has taken a hit, leading some advertisers to experiment with TikTok.

Meanwhile, over at Google…

Like FB with Instagram, Google likes to keep mum on YouTube’s performance. Until now. The tech titan recently reported that its video platform brought in $15.1 billion in ad sales. Not bad. But not Instagram. That could be because long-form video content is out of reach for small businesses and D2C startups.

theCLIKK’s Take: In most cases, we’re seeing cheaper (and higher quality) ad clicks from YouTube and Insta as compared to Google and Facebook. If you’re not using Instagram and YouTube as a marketing channel, it could be time to have a look. We’re also seeing much higher engagement rates organically on Insta than on Facebook. If you ask us, the organic reach of the Facebook Page is all but dead. Organically, you’re much better off to invest time, energy, and money in building a Facebook Group.

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