Instagram Reels will be monetized with ads. Businesses and advertisers worldwide can now buy advertising slots on Reels, the company’s short-form video platform which is also known as a TikTok rival.
Ads will run for up to 30 seconds, much like Reels themselves, and will be vertical, similar to those found in Instagram Stories. In addition to looping, the new ads will also allow users to like, comment, and save them in a similar fashion to these other Reels videos.
Test and Trials of Ads for Instagram Reels
Earlier this year, the company tested Reels ads in select markets, such as India, Brazil, Germany, and Australia, and more recently expanded those tests to include Canada, France, the United Kingdom, and the United States. Brands like BMW, Nestlé (Nespresso), Louis Vuitton, Netflix, and Uber were among the early adopters of the new format.
According to Instagram, the ads will appear in most locations where users will see Reels content, including on the Reels tab, in Stories, in Explore, and in your Instagram Feed. The ads will also appear in between individual Reels. It is necessary for the user to be in the immersive, full-screen Reels viewer in order to see a Reels ad.
As for how often a user might see a Reels ad, the company noted that it depends on how users use Instagram to decide how many ads they see. In addition, it says, it monitors user sentiment around the ads themselves, as well as Reels’ commercial viability.
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How these ads will benefit the advertisers?
Instagram will launch Reels advertising with an auction model, as has been done with its other products. According to test results, Instagram has refused to share any metrics about the performance of these ads.
The company does not yet provide advertisers with any creation tools, templates, or other resources that could assist them in setting up Reels ads. Since Reels ads are similar to vertical video ads found elsewhere, including on Instagram’s competitors, Instagram probably assumes that advertisers already have creative assets or know how to create them.
Vertical video has already proven its ability to drive consumers to e-commerce shopping sites, but Instagram has yet to use Reels ads to drive users to its built-in Instagram Shops, though it seems like a natural next step as it strives to connect all of its parts together.
“Like regular Reels content, these ads will loop and can last up to 30 seconds. People can comment, like, view, save, and share Reels ads.”
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Instagram Reels as Tiktok Rival
In order for this move to be successful, Instagram needs to make Reels an attractive destination – something other TikTok rivals, including both Snap and YouTube, have done by funding creator content directly. Meanwhile, Instagram offered to deal directly with certain TikTok stars.
Actually, TikTok’s ad prices have risen over the past few weeks, which prompted Instagram to launch Reels ads. The Wall Street Journal reported this month that TikTok now charges more than $1.4 million for a home page takeover ad in the United States, something that will increase to $1.8 million by the end of Q4 and more than $2 million during a holiday.
TikTok has now surpassed 100 million monthly active users in the U.S., proving that user growth drives ad budgets – and advertisers are yet to dedicate a significant portion of their budget to the app.
TikTok and Instagram each have more than a billion active monthly users worldwide, though Reels is only a component of Instagram. Comparatively, Instagram Stories has some 500 million users, which shows the app’s ability to drive traffic to a variety of different areas. Reels has yet to disclose its number of users as of today.
In terms of effectiveness, it’s hard to tell, as it largely depends on how creative and engaging the content is. As an example, TikTok ads perform better when they appear organic so users won’t dismiss them immediately.
Hopefully, Instagram’s ad partners will see success with this format at least.
While Instagram hasn’t shared any official usage data for Reels, CEO Adam Mosseri has noted that both the number of posts and the number of viewers are growing. According to Instagram, Reels has seen specific traction in India, where TikTok has been banned since last June and Reels launched a few days after.
As a result of that ongoing push, Reels could be a good advertising option, but individual results will vary, and the format is also likely to change over time.
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