Instagram will exceed 1 billion users worldwide by the end of 2020, a milestone they previously hadn’t anticipated to reach until 2023. This additional growth is largely driven by the COVID pandemic. They had expected the user base to grow by 8.4% year on year before the pandemic, but we have now adjusted their estimate to 22.9%.
The two main pandemic-related drivers are increased screen time and an influx of e-commerce activity. As people have stayed at home during lockdowns, social platforms saw a surge in usage.
Facebook (parent company to Instagram) also shared that they benefitted from the increase in e-commerce activity with brick-and-mortar stores having to shut many businesses had to turn to the digital world to stay connected with their customers.
With this, Instagram has also rolled out a new feed on the Instagram app – ‘Shopping’. This new feature allows retail advertisers to showcase their products with an easier conversion funnel.
All Response Media viewpoint
It’s no surprise that tech giants such as Instagram and Facebook have benefited from the COVID pandemic, but we’ve listed some of the benefits for advertiser from these surges in users:
- 11% of the nation is currently on furlough therefore there will be more and more people are sat at home scrolling on social media which means more impressions to go after.
- With more impressions, we see a reduction in CPM’s, during the first lockdown we saw a reduction of on average 18%. This gives more opportunity for newer or smaller advertisers to stand out from the crowd with smaller advertising budgets, especially the lead up to Black Friday and Cyber Monday.
- For bigger advertisers, this could allow them to test new formats, creatives, and audiences at scale.
- Early Black Friday advertising on Facebook and Instagram is allowing retailers to make up the shortfall that they have faced this year.
- This surge also is allowing advertisers to build up their first-party data ahead of the third-party cookie changes coming in 2022.
From a product perspective with more people using Instagram, this may continue to motivate the tech giant to innovate and launch new features quicker than projected which could be great for all advertisers to test and learn.
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