1/3 of Instagram users have bought directly from an ad, study finds

Brief:

About 60% of Instagram users have followed a new brand on the image-sharing app after seeing an appealing ad in its vertical feed or in Stories, per a study that video technology startup VidMob shared exclusively with Mobile Marketer.
More than one-third of survey respondents said they had bought something directly from an Instagram ad. Gen Zers showed the highest tendency to buy via an ad, while women ages 35 to 45 showed the lowest.
Of Instagram shoppers, men were found to be 10% more likely to buy through the social app compared to women. Among shoppers on Instagram, 81% of women and 75% of men said they had purchased from an unfamiliar brand. VidMob commissioned researcher mFour to survey 1,000 smartphone users ages 16 to 45 last month.

Insight:

VidMob's survey of Instagram users indicates that the platform's shoppable ads are generating a solid rate of direct sales for advertisers, although the response rate for specific ads isn't totally clear. The findings suggest that Instagram is a platform for product discovery, especially for fashion and beauty products among female shoppers and tech products among males. Four out of 10 people who see a product they like on Instagram do additional research within the app, while about 60% research products in other apps or websites, indicating that users are still somewhat wary about making snap purchases.

VidMob's findings support other research that showed the percentage of U.S. internet users who made a purchase through social media grew to 34% this year from 29% in 2018. E-commerce driven by social media still isn't making a significant dent, but is expected to grow in the coming years as consumers grow more comfortable with buying through social media and as platforms add more sophisticated shopping features.

The growth in social shopping indicates that direct-to-consumer (DTC) brands likely are benefiting most from Instagram's push into commerce. Those efforts include the introduction in May of a special account called @shop to bring together posts from online merchants that sell products in the app. In March, Instagram rolled out a native checkout feature with 23 U.S. brands that let shoppers pay for products without leaving the app, and later extended the tool to 55 creators and five publishers for testing. Last year, it introduced a dedicated shopping channel in its Explore tab and to Stories. Instagram also added a collection tab to let users save products they've tagged in Stories and posts, shoppable videos and a shop tab on business pages to showcase all the products from a single brand.

Instagram's parent company Facebook has made a bigger push into commerce to diversify its revenue as ad sales falter. Almost all the company's revenue comes from digital ad sales, but yearly spending growth on digital ads is set to drop to 8% in 2023 from about 18% this year, researcher eMarketer forecasts. Facebook and Google, the digital ad "duopoly," need to bolster their e-commerce revenue as retailers like Amazon, Walmart and Target develop their own digital media networks that blend advertising with direct sales. Amazon reportedly is expanding its influencer commerce efforts with a pilot program that lets tastemakers open digital storefronts to sell curated selections of products.