News: Article

2016

Advertisers prefer Instagram to Twitter for two main reasons

June 14th, 2016 | Read more articles from 2016 or Visit the News Archive
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Originally Appearing at:  Business Insider

By: Andrew Meola

Advertisers have spoken, and Instagram is on the rise.

Instagram has overtaken Twitter as the preferred platform for social media ad campaigns, according to a new study by Comcast-owned STRATA.

The study polled 83 U.S. ad agencies on which social platforms clients preferred for their campaigns, and 63% selected Instagram as their most likely choice, compared to just 56% for Twitter. YouTube placed ahead of Instagram at 67%, though Facebook blew all of its competition out of the water at 96%.

Notably, Snapchat was not included in the study.

Instagram has eclipsed 200,000 monthly active advertisers, and Twitter recently stated in a letter to shareholders that that it had 130,000 active advertisers.

There are two reasons that advertisers now prefer Instagram. In the last three years, Instagram has consistently ranked near the top of social networks among teens, while Twitter’s relevance to this demographic has declined, according to Piper Jaffray.

Instagram also surpassed Twitter in users when it hit 400 million monthly active users in September, as Twitter’s user growth has slowed significantly since 2014. Twitter now has 310 million active users, slightly more than the 302 million users it had in the first quarter of 2015.

Dollars are increasingly flowing from traditional ads to digital, as strong growth in mobile, video, and social spending continue to change the face of the U.S. media market.

Over the next five years, marketers will especially embrace mobile. Mobile will drive up spending on video, search, display, and social, and propel the migration of ad dollars away from traditional media, including newspapers and magazines.

BI Intelligence, Business Insider’s premium research service, has compiled a detailed report that forecasts spending trends for the major digital ad formats — including search, display, and video — and mobile vs. desktop. It also examines trajectories for social ad spending and programmatic ad buying, which cut across digital formats. Finally, the report looks at how spending on traditional media formats will grow or contract over the next five years, as digital, and particularly mobile, rises.

Here are some of the key takeaways from the report:

  • Mobile will be the fastest-growing advertising channel and buoy spending on each of the digital formats. US mobile ad revenue will rise by a 26.5% CAGR through of 2020.
  • Digital video ad spending is rising faster than search and display. US digital video ad revenue will rise by a CAGR of 21.9% through 2020.
  • Mobile search will overtake desktop search ad revenue by 2019. Mobile search ad spend will rise by a 25.2% CAGR, while desktop search ad revenue will decline during the same period.
  • Mobile display ads, including banners, rich media, and sponsorships, will overtake desktop display-related spending even earlier, in 2017.
  • Social media ads, which cut across display and video, are seeing fast adoption. US social media ad revenue, which includes video and display ads, will grow by a CAGR of 14.9% through 2020.
  • The rapid embrace of programmatic ad-buying tools is fueling a dramatic uptick in the share of digital ad spending coming through programmatic channels. Programmatic transactions will be a majority of total US digital ad spend this year.
  • Unlike digital, traditional ad revenue will remain flat overall through 2020. Total traditional ad revenue will rise by a CAGR of just 0.4% between 2015 and 2020.

 

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