Instagram Will Help Its Stars Make More Money, Taking on YouTube

Author

Michael Beach
June 04, 2020

Big news #1: 15s pre-roll ads are coming to Instagram’s longer-form video service IGTV.

Why this matters: IGTV is not off to a strong start, and a big part is the lack of monetization options for creators.  All ad revenue is split between Instagram and the creator which should help.

Quick math on IGTV adoption:
1) 1B+ Instagram users
2) IGTV launched 18+ months ago
3) 1.1M app downloads for IGTV
4) 0.1% of Instagram users have downloaded the IGTV app

Ad revenue split for IGTV video ads:
1) Creator – 55%
2) Instagram – 45%

Big news #2: Custom audience targeting is coming to Facebook Watch.

Why this matters: Facebook can’t hit its revenue targets without significant growth in video advertising.

Key details for Facebook Watch:
1) Viewers/month – 720M
2) Viewers/day – 140M
3) 26 minutes per month for the average viewer

BTW: Facebook counts a view once a user watches 60 consecutive seconds of content.

Big news #3: Facebook will use a TV-like currency (targeted rating points) with Facebook Watch video ads.

Quote from Erik Geisler – Director of Agency Partnerships @ Facebook:“If we’re not delivering TRPs [television rating points], for example, we’re speaking a different language and that makes it hard for an agency to build more expansive plans.”

Social video ad spending by year (% growth) according to eMarketer:
1) 2017 – $5.7B
2) 2018 – $8.2B (↑ 46%)
3) 2019 – $10.7B (↑ 30%)
4) 2020P – $13.0B (↑ 22%)
5) 2021P – $15.3B (↑ 18%)
6) 2022P – $17.8B (↑ 16%)
7) 2023P – $20.4B (↑ 15%)
8) 2024P – $22.4B (↑ 10%)

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