Instagram Stories: New Facebook Placement Option Decreases Cost of Customer Acquisition by Nearly 50 Percent for Product Subscription Business

by Andrew Krebs-Smith | January 18

The Facebook platform gives advertisers a number of placement options. One of the newest is also one of the most exciting to us based on early testing: Instagram Stories. It’s a feature that allows users to share a slideshow of pictures or videos that disappears after 24 hours.

 

It didn’t take long for Instagram Stories to find an audience—and a huge one at that. Facebook launched Instagram Stories in August of 2016. By November 2017, Zuckerberg announced that Stories has 300 million active daily users. And if the adoption rate holds steady, it’s likely approaching 350 million by now, nearly doubling the number of users of Snapchat—the rival platform.

 

Facebook started offering Instagram Stories as an ad placement option early last year, and we started testing it for two clients shortly after. Both are subscription services, offering products that skew to a female demographic. (Instagram’s user base is nearly 70 percent female, but the Instagram Stories demographic is unclear—more testing will help us make a better determination.) Users can’t comment on Instagram stories—just scroll through them. Unlike ads that appear in an Instagram feed, Instagram Stories ads are essentially horizontal images that flow with the feel of the images in a user’s slideshow. They are much less copy-driven than typical Instagram ads, as any worded content has to be embedded in the image.

When we targeted ads to interest-based audiences, we saw a significant drop in cost per customer acquisition (COCA). For Client A, COCA fell from $25 to less than $14. Client B saw COCA drop from $65 to $35

 

We’re now exploring how scalable Instagram Stories is—we’ve upped the daily spend for one of the clients by 400 percent already and have seen no drop-off in results. We continue to test creative and develop more knowledge on audiences, as we are rolling it out to new clients. Because the placement has performed so well for driving subscription services—we think the results for retail and e-commerce will be even better.

 

Now is the right time to get started with Instagram Stories placements, in our view. It’s a less expensive placement with far less competition from other advertisers. This might be a temporary lag. Given its quick adoption by users and its impact on COCA, the word will soon get out.

 

Now is also the right time to work with Social Fulcrum to explore Instagram Stories. As a Facebook product, it is governed by Facebook’s systems, and we know how to work with them to test creative that works and to find, segment and manage multiple audiences to get you the best price per outcome.  And we know how to scale quickly and effectively.

 

The bottom line: Instagram Stories is delivering great results at a surprisingly—and perhaps temporarily—low cost. If you’d like to know more, get in touch.

 

 

Andrew Krebs-Smith
About the author

Andrew Krebs-Smith

Helping B2C Retail/Ecomm companies test, measure, and scale digital marketing. Trying to fix the agency model so that agencies are accountable to every client media dollar they spend.