We continue to hear about declines in engagement and ad revenue across social apps. This happens as ad budgets are usually the first thing to go in a softened economy. That smaller pie is then divided among a larger group of publishers as the supply side (social apps) continues to fragment.
The latter is mostly about TikTok as it entered the picture a few years ago and siphoned off meaningful portions of brands’ social ad budgets from other players. Snap has been one affected party. Though its engagement is high, its monetization and ARPU sits below others like Instagram and TikTok.
But speaking of TikTok, there’s such a thing as too much monetization. TikTok has been slammed over the past year or so, as its users gripe about a UX that has become overrun with commercial content. This has degraded the raw and genuine vibes at the heart of TikTok’s discovery engine, and its early appeal.
Strategic Balance
Amidst all this strategic balancing of engagement and monetization, the latest figures show that Instagram is now seeing some declines. That’s happening on both the creator/content level and on ad dollars that the app is attracting. Both are obviously important as one drives the other.
Taking those one at a time, eMarketer reports that 86 percent of content creators and publishers report posting on Instagram in Q3. This is down 91 percent in the year-ago period. Frequency has also declined with 52 percent saying they post on a daily basis, which is down from 69 percent in 2023.
The one piece of good news for Instagram is that original content is growing. Specifically, 44 percent of publishers and content creators say they invest in original content production on Instagram, which is up from 39 percent in 2023. Then again, that money goes to content production, not necessarily Instagram.
That brings us to the other metric noted above: ad spending on Instagram. That’s likewise down as noted, to the tune of 55 percent of publishers purchasing ads, down from 61 percent last year. This survey covers publishers’ ad spend (not all brands) so is just one part of the picture, but still notable.
Key Question
So what’s driving the above declines? This is a key question given that Instagram has always remained relatively strong in engagement and monetization amidst challenging times in the broader social marketing universe. According to eMarketer, the answer may lie in a declining perceived ROI.
Specifically, 38 percent of publishers consider the ROI to be valuable or extremely valuable, down from 47 percent last year. When looking at the opposite end of the affinity spectrum, 22 percent report that Instagram is not very valuable in ROI terms, up from 7 percent in 2023 – an alarming jump.
A related metric is branding value – considering the upper-funnel high-reach that a given ad vehicle delivers. On that measure, 68 percent of publishers rate Instagram valuable or extremely valuable, which is down from 86 percent last year. Altogether, Instagram is down on nearly every affinity metric.
Going deeper into the question of “why?”, eMarketer notes that political news publishers are featured less in Instagram and Facebook, due to Meta’s aversion to misinformation backlash. But on the bright side, much of that spend has shifted to Meta-owned WhatsApp. So Meta lives to fight another day…
