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Instagram debuts ads in user profile feeds as Meta fights to reverse revenue declines

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By Kendra Clark | Senior Reporter

October 4, 2022 | 6 min read

New ad formats on Instagram aim to help the tech titan recoup ad revenue losses amid ongoing troubles.

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Instagram is rolling out new profile feed ads / Pexels

With users leaving Meta-owned platforms in droves and Apple’s privacy-centric iOS updates chipping steadily away at the company’s ability to serve targeted ads, the tech giant is in a bit of a pickle. Or, as CNBC has put it, a “death spiral.” The company posted the first quarterly dip in revenue in its history in the second quarter.

A year after the company saw its valuation hit an all-time high of $1tn, the tech giant has now lost about two-thirds of that value. At the tail end of September, the company’s stock tanked to its lowest value since 2019.

In an effort to recoup declining returns on advertising, the company today announced it is adding new ad formats to Instagram. Advertisers on the app will soon be able to place ads on users’ Explore home tab as well as within user profile feeds.

“Explore home, the grid that people see when they first arrive on the Explore tab, will now feature ads to reach people in the earliest stages of discovering new content they care about,” the company said in a blog post today.

Per reports by TechCrunch, the new format will be made available to advertisers globally.

Meanwhile, the company is also testing advertising on profile feeds – the feed that can be accessed when a user visits another user’s profile, clicks on a post and scrolls. The ads will only be tested on non-teen users with public accounts. As a part of the testing process, Meta will try out a new monetization model that enables creators to cash in on ads that appear in their profile feeds.

“Ads in profile feed give advertisers the opportunity to expand their reach easily using existing feed assets, while giving people the same personalized ad experience they enjoy in their main Instagram feed,” the company said in its post today.

Some marketers, however, see these changes as desperate ploys for ad dollars. “Meta’s stock is in a death spiral and so they’re going to pump Instagram with ads to try to make the numbers rosier,” says Adam Berkowitz, chief of staff at marketing platform LiveIntent. “It won’t work. Advertisers have wised up and are starting to divert spend to other logged-in channels and platforms.”

Berkowitz suggests that amid increasing distrust in media and rampant misinformation, advertisers are ever-more wary of promoting their brands alongside user-generated content, which may not be brand-safe. “However,” he caveats, “advertisers love the logged-in nature of the walled gardens, so publishers who can deliver logged-in audiences in their own logged-in environments are likely to enjoy the rewards Meta is now chasing.”

Adding to its new profile feed and Explore tab ads, Meta announced it is also debuting a beta of a new AR advertising offering, which will be made available for both in-feed and Stories placements. Using technology built by Spark AR, brands can, per Meta, “encourage people to interact with [visual effects] through their surroundings.”

The tech titan is also rolling out new multi-advertiser ads, which enable brands to better tap into consumer intent. When a user has engaged with an ad in their feed, Instagram will now serve more ads from brands that may be relevant to the user, using machine learning capabilities.

The announcements add to a flurry of recent product changes for advertisers on Meta platforms. In the last month, the company has debuted a new ad offering for Facebook Reels, following the successful rollout of Instagram Reels ads last year. And starting this month, the company is reportedly testing what it calls ‘image carousel’ ads on Facebook Reels – scrollable image-based ads placed beneath Facebook Reels content.

The new ad features announced today – though likely to displease users – may attract much-needed additional ad spend for Meta and help it better monetize its still-nascent Reels offering, a TikTok competitor.

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