Brands are getting savvier with Instagram Stories, hoping to avoid burning their media budgets on lousy ads

  • Brands including Cisco, Smirnoff, Budweiser, and Benefit Cosmetics are using Instagram Stories as a testing ground.

  • These marketers have been posting free Stories to Instagram to evaluate what performs best among consumers, before putting money behind them for paid ads.

  • As Instagram starts becoming a more crucial ad vehicle, marketers are looking to ensure their budgets are being used to support the most effective ads.

With more than 400 million users lapping up content on Instagram Stories daily, the format has become hard to ignore for advertisers. And now they're getting savvier about using the nascent platform, hoping to avoid burning their media budgets on lousy ads.

The likes of Cisco, Smirnoff, Budweiser, and Benefit Cosmetics are using Instagram Stories as a testing ground for ads. Specifically, they have been publishing organic Instagram Stories or making small bets on sponsored ads, seeing which ones users respond to, and then dialling up the dollars on the most effective ads.

For example, Benefit's digital and social media team noticed that tutorials had consistently performed better organically on Instagram Stories. So when it launched its new Bad Gal Bang mascara back in February this year, it ran tutorial-style sponsored ads on Instagram Stories promoting the product.

Benefit is also currently running a selfie-style campaign with infuencer Melissa Alatorre for its Brow Contour Pro product, because the team had noted over time that such native content resonated better with its audience in Instagram Stories than traditional, highly-produced ads.

“We always leverage organic performance to inform our paid content strategy, because it offers us an early read on what actually resonates with our audience before we decide to invest," Laurin Hicks, director of digital marketing at Benefit Cosmetics, told Business Insider.

'We need to be putting money behind what we know would actually work'

Cisco is another example. The company's talent team is currently testing Instagram Stories aimed at attracting external talent.on its own account @wearecisco before it turns them into sponsored posts.

The team is looking at a variety of metrics, from reach to the completion rate, to determine which posts should be boosted as ads.

"We don’t have a ton of money for paid media, so when we do it, we need to be putting money behind what we know would actually work," Carmen Collins, senior social media and talent brand manager at Cisco's talent brand team, told Business Insider.

So far, Cisco has found that employee-generated content — where employees share what it's like to work at the company or where diverse employees are spotlighted — have a completion rate of 70 to 80%, outperforming other posts.

"Employee-generated content means it’s more trustworthy to the audience," said Collins.

And it's not just teams with limited budgets using this approach. Budweiser, which ran its biggest-ever commercial campaign during the soccer World Cup this summer spanning more than 50 countries, also relied on the tactic, according to Hugh Cullman, global head of media strategy at Anheuser-Busch InBev.

It went a step further, and put "small bets" to amplify every piece of content on Instagram Stories during the tournament, said Cullman.

When it saw something resonate, it amped up the investment by as much as 10 times. An example was an interview with Christiano Ronaldo, who won man of the match against a match Portugal had with Morocco. When that story did well, Budweiser boosted it further.

"It was a format that worked because it was a great way within a 24-hour period to showcase all the work we were doing," said Cullman. "Within minutes, we could tell whether a piece of content was performing and whether we needed to add more fuel to fire."

The company declined to give specific budgets.

To be sure, brands have long tested various ads on social media before rolling the best peformers out widely. But it becomes more important as Instagram starts accounting for a greater chunk of brands' digital budgets. Plus, Stories allows them to essentially test ads without having to pay for ad space.

Overall, advertisers are spending dramatically more ad dollars in Instagram Stories ads, according to online advertising platform, with the ad budget devoted to Stories jumping from a little over 1% to 17% of overall Instagram ad spend between May 2017 and 2018.

"It’s a great tactic," said Victor Pineiro, SVP of social media at Big Spaceship. "Audience engagement is huge, it takes on a more playful vibe, and it provides immediate insights."

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