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Instagram's Digital Ad Share to Double Despite Facebook Issues

Kamaron Leach
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Instagram's Digital Ad Share to Double Despite Facebook Issues

Instagram's Digital Ad Share to Double Despite Facebook Issues

(Bloomberg) -- Instagram is poised to reign as the darling of Facebook Inc. apps, offering a life boat for the core platform during a bout of privacy concerns.

Cowen says the photo-sharing app’s share of digital video budgets from ad buyers will double from 2018 to 2020. In fact, Instagram has grown as the go-to choice for launching new brand campaigns looking to reach ages thirteen to thirty-four, according to 61 percent of survey respondents to a Cowen study representing about $14 billion in ad spend.

“Stories” -- a relatively new Instagram feature -- are helping to grow the app into a campaign favorite. Instagram Stories appear “poised for greater adoption” as more ad buyers allocated some portion of their spend to the feature in 2018 than the year prior, said Cowen’s John Blackledge in a note. Instagram even beat out TV in this younger target group, a medium only 3 percent of respondents said was a primary platform.

The story changes when looking at people thirty-five and up. The survey indicated Facebook’s core platform remains essential for brand agencies targeting the group, which bested both YouTube and Instagram but lagged the old-faithful television. All in all, Cowen sees these trends as growth drivers for the parent company to expand its video content over the next two to three years.

Facebook shares fell as much as 2.4 percent intraday in New York amid a pullback in the broader market. Cowen lowered its price target on Facebook’s outperform-rated stock to $184 per share from $195.

To contact the reporter on this story: Kamaron Leach in New York at kleach6@bloomberg.net

To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Sebastian Silva

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