Instagram has announced two new tools aimed at opening up new avenues for advertising, as the social network struggles with weak advertising demand. One of the new tools being tested is ads in search results, which are designed to reach people actively searching for businesses, products and content. Instagram will begin by testing these ads in the feed that appears when people tap into a post from search results. Once the testing phase is completed, the company plans to roll out ads in search results worldwide in the coming months. However, the launch may not be welcomed by consumers, as it brings ads to yet another part of the social network.
The ads in search results will show up based on the user’s search. For instance, if someone searches for “Skin Care,” they will see relevant ads within the search results feed. Users will be able to tell the difference between ads and regular posts through a “Sponsored” label under the account’s name. Instagram hopes that these new tools will help advertisers reach new audiences and boost the company’s revenue at a time when it is seeing declining ad sales.
Along with ads in search results, Instagram is also launching Reminder Ads, which are designed to help businesses announce, remind, and notify people of future events or launches. The idea behind Reminder Ads is to help advertisers build awareness and anticipation for upcoming events. Users can opt-in to receive reminders and receive three notifications from Instagram, one day before the event, 15 minutes before, and at the time of the event. Reminder Ads will be available to all advertisers as an option in feed.
As part of its Q4 2022 earning results, Instagram’s parent company, Meta, revealed that its ad revenue fell to $31.2 billion from $32.6 billion in the same quarter last year. Meta CFO Susan Li noted that Q4 revenue for the company remained under pressure from weak advertising demand due to the uncertain and volatile macroeconomic landscape. After reporting its first-ever quarterly revenue decline in Q2 2022 due to declining ad sales, Meta increased its ad load on Instagram with the launch of two new ad slots. Meta launched a new ad format for Facebook Reels and started allowing advertisers to run ads on the Explore home page and in profile feeds.
Snap CEO Evan Spiegel has also been grappling with weak advertising demand, telling analysts last month that advertising demand hasn’t improved due to advertisers managing their budgets at a time of economic uncertainty. While these new tools may help Instagram increase its revenue, it remains to be seen how consumers will respond to ads in yet another part of the social network.
