Instagram Stories is this year's "little black dress" of advertising--the hot-yet-versatile new look all brands need to have in the lineup.
"It's so relevant and brings forward this real-time moment for brands to really wrap themselves in," said Kyra Ulmer, evp of partnerships at Brand Networks.
Snapchat may have invented the vertical story format, but the Instagram clone has outpaced it with 200 million daily users, giving advertisers yet another reason to create commercials in portrait mode.
For brands and publishers trying to figure out which app is most appropriate for their content, audiences and ads, here's a breakdown.
Instagram's Stories have 200 million viewers a day, known as daily active users -- half of all of Instagram's has 400 million daily active users. Still, Instagram does not say how much time is spent viewing stories, which can be created by everyday users, brands and publishers.
"The social landscape today is becoming about entrapment, because in the battle of media budgets, 'time spent' is a selling tool that most non-TV platforms look to," said Chanelle Flavell, group communications strategy director at Droga5, in an e-mail. "So because stories use up valuable time and engagements on social platforms, it's not surprising that Instagram and Facebook are following in Snapchat's footsteps."
Snapchat has said it has 158 million daily active users, spending 25 to 30 minutes with the app on average.
Winner: Instagram has scale that is almost impossible to challenge seriously, and it's owned by Facebook with 1.86 billion users. Size isn't everything, but it counts in a measuring contest.
Instagram Story ads can cost half the price of Snapchat ads, according to an agency executive, who shared the results of a campaign on condition of anonymity. The Instagram ads cost $4 CPMs (price per 1,000 impressions) versus $8.50 for Snapchat. Of course, that's just one campaign, and Snapchat ads can be bought for less through the company's ad partners, but those are considered less premium with no guarantees over the placement.
In this particular campaign the advertisers was able to get between 400,000 and 450,000 impressions on each platform. On Instagram 4.5% of people who saw the ad watched it to the end, compared to 3.5% on Snapchat.
Winner: Instagram again, because it does have Facebook in its corner, which gives it that instant scale and ad technology to sell highly targeted ads in a cost effective way.
"Every brand advertiser is digging into Instagram Stories," said Justin Rezvani, founder of theAmplify, a data and technology influencer platform. "The sheer scale of it, the views you get, especially when influencers post for brands. It's now a part of every one of our campaigns."
Facebook has stuffed all its platforms with a stories section, because the format opened a whole new ad style that its properties needed—full screen, full sound, full attention. Snapchat had cracked that with its app but Facebook wasn't about to miss out.
Instagram was the first of Facebook's apps to put ads in between stories, which run when people tap from one story to the next, while Snapchat ads run after a story or inside stories and channels run by top publishers like BuzzFeed, The New York Times, Vice, ESPN and others.
The ads on Instagram look similar to standard video Snap Ads, but it does not have a direct-response ad unit, yet. On Snapchat ads can lead to app downloads, retail opportunities, even games right in the experience. Instagram has plenty of direct response in the rest of the app, but stories is more of a brand awareness play.
Winner: Snapchat wins here. It invented this style of ad, and Instagram adopting it just means more brands will create this way.
Snapchat has an exclusive publisher and media section with Vice and BuzzFeed, and recently brought on more Condé Nast properties like GQ and Wired. These channels offer a unique proposition in all of mobile, where the media companies are curating daily editions of articles, video stories, animations and games, and they share ad revenue. However, if a publisher is not an official partner, they don't have the same motivation to create private channels for the platform.
Instagram Stories is another, well, story. A number of publishers are making it a key piece of their social strategy. "They're our biggest source of traffic behind Google and Facebook," said Ashley Lutz, a deputy editor at Business Insider. "So, meaningful traffic comes from Instagram Stories." Everyone on BI's editorial team now thinks about adding Instagram Story components to almost every story, Ms. Lutz said.
Publishers do not share in revenue on Instagram, but they can link out of the videos to their sites where they do receive the ad revenue. There's also more data for publishers on Instagram to examine their performance, especially compared to posting on Snapchat from an everyday account.
Winner: This is a tie. If you're an official partner, Snapchat offers a new way of creating content and actually making money from it. If you're not a partner, you're kind of out of luck on Snapchat, and Instagram is the place to invest time and resources.