As Facebook Users Shift to Stories, Advertisers Look to Follow


Ad spend on Stories is growing but marketers are still playing catch-up

Growth in Facebook Inc.’s FB -0.92% ad sales will slow at least temporarily, Chief Executive Mark Zuckerberg acknowledged this week, as advertisers trail users in moving to the network’s newer format of Stories from its news feed.

Mr. Zuckerberg said he is confident that Facebook can ride out the transition, but marketers have a new learning curve to quickly climb if they want to stay close to consumers.

“Because the way people consume Stories is so different than the way they consume Feed content, everything from the creative strategy, to the story you want to tell, to the physical way you are shooting the asset is different,” said Kerry Perse, managing director of social at Omnicom media agency OMD.

More than 1 billion Stories—montages of photos or videos that disappear after 24 hours—are shared daily across Facebook, Instagram and WhatsApp, Facebook said on its third-quarter earnings call Tuesday. “All of the trends that we’ve seen suggest that in the not-too-distant future, people will be sharing more into Stories than they will into Feeds,” Mr. Zuckerberg said on the call.

Facebook’s pitch for ads on Stories isn’t only about the format’s popularity. The ads on Stories grab attention because they take over the entire screen of the phone, offering marketers a large, interactive canvas for their photos and videos, ad buyers say.

The flip side is an ad format that is uncommon outside of Snapchat, which pioneered the Stories format.

The “first thing to get push back on in production meetings” is shooting ads vertically, to fit the way users hold their mobile phones, said Mark Sytsma, associate director of paid social at Huge, a digital ad agency.

There are other considerations particular to Stories ads, such as the need to create photos and videos that instantly attract users’ attention and prevent them from tapping the screen to skip ahead. “You’re at the mercy of a users’ thumb clicking through the story very quickly,” said Wesley MacLaggan, senior vice president of marketing at Marin Software , an ad-management platform.

Facebook declined to comment for this article, pointing to executives’ comments on the earnings call and elsewhere.

The more time users spend in interacting with Stories, the more opportunity there is for Facebook to serve ads. Yet advertiser demand for new formats can lag user engagement as they attempt to figure out how to drive the best results from them, which can initially lead to lower prices in the auction-based ad environment.

The cost of 1,000 user impressions on Facebook Stories, which only rolled out globally to all advertisers in September, is around $4, compared with $5 on the news feed, according to marketing technology company 4C Insights.

The experience of Instagram, where Stories arrived earlier, suggests that the price of Facebook Stories advertising will eventually catch up to feed ads. The CPM—advertising parlance for the cost per thousand ad impressions—for an Instagram ad in either Stories or the feed was roughly $4 over the past month, a 4C spokeswoman said.

Depending on the specific audiences that brands are looking to target, the CPMs on Instagram Stories can run into the $20 range, said Huge’s Mr. Sytsma.

And Marin Software clients’ spending on Instagram Stories grew to 25% of their Instagram outlay in the third quarter of this year from 8% a year earlier, Mr. MacLaggan said.

The percentage of Facebook spend directed toward Facebook Stories remains a “fraction of a percent,” he said.

To help close the gap between consumers and advertisers, Facebook is offering clients so-called Stories School education sessions to marketers and their agencies.

Facebook’s Ad Manager tool may also benefit Stories ads in the long run. It lets marketers easily buy inventory across its products, including the main app, Instagram and its Audience Network, which runs ads across outside apps and websites. Buyers can tick boxes to send their creative work across Facebook’s entire portfolio, without having to buy each separately. As the Stories ad format continues to gain popularity on Instagram, the Ad Manager tool may encourage more buyers to purchase Stories ads on Facebook’s other platforms.

Still, the news feed isn’t going away, with 1.5 billion users logging into Facebook every day.

For some clients, Stories ads are driving more engagement, such as swiping up to learn more about a product, than ads in the feed, according to Courtney Blount, group director at MDC Partners media planning and buying agency the Media Kitchen. But the feed still offers the chance to reach more people.

We “continue to use both and keep both within our mix,” Ms. Blount said.

This article first appeared in

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About Author

Lara O'Reilly

Lara O'Reilly is Business Insider's global advertising editor. She joined Business Insider in 2014 from Marketing Week UK where she worked on the news desk since 2010. In 2014 she was named by MHP Communications as one of the '30 under 30 to watch' in British journalism at its annual awards. Lara has also written for other titles including Press Gazette, Camouflage, The Worthing Herald, and X Magazine.

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