In June, Instagram rolled out Reels adverts globally. The launch follows successful testing in Australia, Brazil, Germany and India, and it allows creators and brands to monetise their content through short video clips. 

The ads look like any other Reels post: full-screen vertical video and looping for up to 30 seconds. They can be found in the Reels tab, Reels in Explore and Reels in feeds. Users can identify them by a small ‘Sponsored’ tag below the name of the advertiser’s account. Like any other ads, if a user sees one they don't like, they can be skipped, hid or reported.

Ecommerce opportunities

There is no available data yet on Reels ads performance, but the opportunities that the new offering presents are clear. This update offers many new ecommerce opportunities for influencers and brands, providing strong competition to short-form video rival TikTok. 

A recent study of 60 high-profile accounts by The Influencer Marketing Factory showed that the total average views on TikTok came to 1.19 million, while Instagram Reels reached 1.2+ million. Perhaps more importantly, there was a stark difference in the ​​views per number of followers, with Instagram Reels registering a 144% view rate, while it was just 24% for TikTok.

Followers of fashion?

As influencers and brands begin to produce ads through Reels, it will be interesting to see how the new feature evolves – and the industries that become early adopters. Short-form video adverts are typically most popular in the fashion sector, where brands benefit from having a 3D visual to showcase new products. 

In our most recent Battenhall Instagram Brands report, we revealed that 40% of the top 100 brands are active Reels users. This is likely to be even higher now. Luxury brands like Louis Vuitton have been among the most active on Reels since the product was launched last August. This new ads feature could make Reels even more popular with fashion and luxury brands in the months to come. 

Instagram changes

It's perhaps no coincidence that Reels ads has been unveiled at the same time as head of Instagram, Adam Mosseri, publicly announced that the company is “looking to lean into entertainment and video after seeing the success of competitors like TikTok and YouTube”. 

In recent social posts, Mosseri has set out a vision for Instagram to be more “video-based”, with emphasis on improvements to content on IGTV, Reels and Stories. Monetising Reels is part of a strategic effort to change Instagram’s overall focus, moving from static images to video content.

Generation game

The question now, though, is whether monetisation options will affect user satisfaction on the platform. According to Cambridge Web Marketing Company, "69% of Gen Z consumers actively avoid advertisements and those that do prefer their ads to be less than 10 seconds long". This is significant, considering that 71% of 18-to-29 year-olds say they use Instagram. It will be interesting to see how Gen Z settles into the latest updates. 

With more focus on video content on Instagram, it’s likely that further monetisation options are on the horizon. In the meantime, the Reels update has created an opportunity for brands to have a bigger presence on the platform.

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