Advertisers will pounce on Instagram Reels

Chris Pash
By Chris Pash | 3 September 2020

Instagram’s Reels, the platform’s answer to TikTok, could add $US2.5 billion in revenue in 2022 for Facebook, says investment bank Jefferies.

Analysts at the bank believe Reels, which lets users record 15-second clips set to music, could be Facebook’s next key product catalyst, with impressive engagement among Instagram users who have used it.

“The Reels launch reminds us of Instagram Stories, which became the largest driver of ad impression growth within three years of launch,” say analysts at Jefferies.

“We would expect advertisers to quickly adopt the Reels format as soon as advertising is available.”

The bank surveyed 819 Instagram users ages 13+ to gauge interest and usage levels of Reels launched on Instagram in early August.

A third (32%) said are using Reels but those using it are highly engaged, with half reporting daily usage.

More than a third (36%) of those Reels users said they found the product very engaging and spent a lot of time scrolling through videos.

Only 12% said they found the product boring and didn't see themselves spending much time using it.

“Though 42% of Reels users claimed they preferred using other video platforms (e.g. TikTok), we believe it takes time for users to adapt their behaviors to new products,” write the analysts in a note to clients


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