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One month after Instagram opened advertising to small and mid-size agencies Penna Powers had the opportunity to launch test campaigns for both sponsored posts and videos. These campaigns tested various demographics in the non-profit/government and retail verticals. Both tests allowed us to successfully engage the designated audiences, driving website clicks, brand awareness and engagements. But most importantly, the campaigns provided Instagram advertising metrics for us to share with the world.

Storytelling is what Instagram does best, add in Facebook’s excellent targeting capabilities and your brand story can now be seen by the exact audience you’re seeking. Our campaigns set out targeting two very different audiences, teenagers (13-17) in the non-profit/government campaign and M/F (18+) in the retail campaign. The wide audience in the retail vertical was chosen to allow us to gauge a true CPM benchmark based on a large demographic segment. We were curious to see if Instagram’s estimated CPM of $13 held true or if our campaigns would come in much higher, even or much lower. Both campaign results are listed below presenting a much lower CPM in both instances by a healthy margin. The non-profit/government campaign also presented interesting data that teenagers will actively engage with Instagram content even though studies are showing a migration to other social media channels such as Snapchat. The wide audience in the retail vertical aligned with established Instagram data with the millennial audience outperforming all other segments of the target demographic. Instagram advertising is uniquely positioned to help push Facebook even further ahead of Twitter and Google in the social advertising front.

Instagram Advertising Campaign Performance:

 Campaign 1- non-profit/government- Sponsored Posts:

  • CPC: $0.14
  • CPM: $4.17*
  • CTR: 2.96%

Campaign 2 – Retail- Sponsored Posts:

  • CPC: $0.44
  • CPM: $6.58*
  • CTR: 1.47%

Campaign 2 – Retail- Sponsored Video:

  • CPV: $0.01
  • CPM: $2.48*
  • CTR: 2.08%

*Instagram estimated CPMs of $13

Instagram Advertiser Results (Instagram for Business Blog):

  • 97% lift in ad recall
  • 16-point average ad recall lift
  • 7x higher Nielsen ad recall vs. other study data

Users spend on average 5 minutes per day on Instagram and Facebook.

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We look to Facebook to begin tying in retargeting between the two ad platforms serving ads to the audience members who may have interacted with one on Facebook or Instagram presenting an opportunity for marketers to have even better data and more audience touch points. At the end of the day social media is all about engagements with the line between a website click and a comment blurring every day. The new advertising opportunity has brought about change within our own Social Media Department with the team shifting dollars almost immediately from Twitter to Instagram because of the superior ad products and the fact that Instagram blows away Twitter engagements.

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Content marketing is exploding. It makes sense, as a written article or produced video can convey more information and users actually choose to read/watch it. Companies are willing to pay content marketers, including YouTubers, big dollars to have them promote their product.

So how much do they really make? Well, let’s look first at how much companies pay them to promote a product and secondly let’s look at how much YouTube pays them to run ads.

How Much do You Pay a YouTuber to Promote Your Product. Obviously this varies widely depending on the YouTuber’s audience and the marketing objective. In general, YouTubers typically charge around $10,000 per 100,000 views. It’s difficult to predict how many views a native video will get, so that is the risk an advertiser takes.

How Much YouTube Pays YouTubers Per View. Once the YouTuber links Google AdSense to their channel, they make 68% of the ad revenue (see Google AdSense Revenue Share). YouTube charges advertisers when a viewer watches 30 seconds or more of the ad, and typically charges around $.18 per view (see How Much Do Ads on YouTube Cost). Only about 15% of viewers will be counted as a “paid view” since many of them skip.

So if you have 1,000 views to your video and 15% actually watch the ad, then you would have 150 paid views. At $.18 per view, this would equate to $27 total charged to the advertiser. As the content creator you get 68% of that, so you would average around $18 per 1,000 views.

Here is it another way:

1,000 views –> 150 views of people completing the ad

$.18 per view x 150 views = $27 charged to advertiser

$27 advertiser charge x 68% revenue share = $18 paid to content creator per 1,000 views

Who are the Top YouTubers? In 2014, the top YouTuber made $4.9 million unboxing toys. Yes that’s right, the whole channel is just her unboxing Disney toys. Her top video, Play Doh Sparkle Princess, has garnered 217 million views. Other examples include PewDiePie, which made $4 million in 2014 and LittleBabyBum, which made $3.5 million. If this makes you question everything you’ve done in your life, you’re not alone.

Should Marketers Pay YouTubers to Make Videos? To say it depends is kind of a cop-out, so I’m going to compare the cost per thousand views to if you just ran an online video ad instead.

Making Videos. From above, you could calculate that to have a YouTuber make a video and post it to their channel you would be paying roughly $10,000 for 100,000 views, which breaks down to $100 per 1,000 views.

Running Video Ads. If you opted to just run an ad on their channel, you would pay $27 per 1,000 views (but only really get 150 completed views). To get 1,000 completed views it would cost $405.

Both are good options. Video is much more visual than any other media so if you’re debating between the two you have a good problem. Having a YouTuber produce a video is comparatively less expensive, but you give up creative control and cannot know how successful the video will be. Also you are limited to just their channel, so you may need to do multiple of these deals. Some of the pros are that you get a customized piece of content that doesn’t feel like an ad, and oftentimes these channels reach audiences that don’t consume general mass media. Paid ads are just that – paid ads, and oftentimes users feel inconvenienced when forced to watch them. However, the targeting is great and can oftentimes tie into your larger marketing strategy.

Need help deciding on your video content strategy? Let us help!

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