A few examples of Instagram ads from its blog.
A few examples of Instagram ads from its blog.

We’ve been seeing ads on Instagram since as early as October 2013, but it wasn’t until last fall that parent company Facebook ($FB) opened the floodgates for anyone interested in advertising to the photo/video-sharing app’s more than 400 million users. To make the ad buying process easier, Instagram launched a partner program this past summer, and Boston ad tech company Brand Networks was one of its earliest partners, helping advertisers serve more effective ads and grow their business.

One of the bigger takeaways? More and more advertisers want in with Instagram.

Now, after six months of studying how Instagram’s ad platform works, Brand Networks has released an in-depth study that breaks down a number of trends the company found. This is based on the more than 1.6 billion ad impressions it served for its customers during that period.

Two of the bigger takeaways? More and more advertisers want in with Instagram, and more and more ads are being served than ever before.

Jamie Tedford, CEO and founder of Brand Networks.
Jamie Tedford, CEO and founder of Brand Networks.

“We anticipated that pent-up demand for programmatic, native advertising solutions on Instagram would drive rapid adoption and eventually scale,” Jamie Tedford, CEO and founder of Brand Networks, said in a statement. “However, the pace and scale of investment from our clients in key verticals exceeded our expectations dramatically.”

Here’s some of its key findings:

A growing demand to serve ads has caused a surge in pricing: Brand Networks saw the average cost-per 1,000 impressions (CPM) of ads go from $5.21 in September to a peak of $7.20 in November. It then went back down to $5.94 in December.

Instagram ads doubled in Brand Networks’ first few months: The total number of ad impressions the company served through Instagram started with 50,000 in August, then doubled to 100,000 in September, and again to 200,000 in October. Ad impressions then jumped to more than 500,000 in November. After, ad impression growth started to slow down, reaching 670,000 in December. Brand Networks has projected that it will reach more than 1 billion ad impressions per month by the end of Q1 2016.

The fashion, retail and consumer packaged goods sectors all performed well, but for different reasons: Consumer packaged good advertisers paid an average CPM of $4.92 through the holidays, which Brand Networks said represented the best average cost for reaching a large audience. Fashion advertisers, on the other hand, paid a much higher CPM, at $16.93 on average, but saw a low average for cost per engagement (CPE) at $3.91, 98 cents lower than consumer packaged goods’ average. Retail advertisers also performed well with low CPE averages, reaching $1.40 and $3.22 for clickable Instagram share ads and photo ads respectively.

The number of video ads are increasing: Brand Networks said the number of video ads as a percentage of total ads it served went from 9.54 percent in September to 22.52 percent in December.

“This year, we expect brands from a wider variety of industries will invest heavily on the platform.”

The holidays were prime time for advertisers (obviously): Brand Networks found that advertisers started spending big in early November to ramp up to the holiday season. During Black Friday alone, retail advertisers had 7.5 million impressions served through Brand Networks, which was more than double the 3.3 million daily impressions that happened on average during that month. On Cyber Monday, a majority of impressions served by Brand Networks for retail advertisers were video ads.

In closing, Tedford said he expects advertising to ramp up even more, with more industries looking to get a share of Instagram’s ad space. The company’s full report can be found here.

“This year, we expect brands from a wider variety of industries will invest heavily on the platform, and experiment with a variety of ad formats—especially video—to stand out in the Instagram feed and reach valuable audiences,” Tedford said. “In addition to brand-building objectives, we’re also enabling more testing with direct-response ads, as social media users become more accustomed to CTA buttons and more apt to engage in social commerce.”

Tech writer for BostInno since 2015. Always looking for the real story behind the headlines. Have a tip about something our readers should know? Send me an email at dmartin@americaninno.com. I'm also available to talk on encrypted messaging apps.