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Facebook says 300 million people are engaging with Stories every day - so its flipping the switch on what it hopes is its next huge ad opportunity

Sep 27, 2018, 01:05 IST

Justin Sullivan/Getty Images

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  • Facebook is banking on its ephemeral format Stories to boost its stalling growth - and sustain its ad revenue.
  • The company announced Wednesday that it was rolling out ads on Facebook and Messenger Stories globally, after testing ads since May.
  • The company is trying to push adoption of the format among users and advertisers.
  • Advertisers are beginning to see value of using Stories to optimize for reach, reaching more people with their ads across more apps at lower costs.

Facebook is counting on Stories to boost its stalling growth.

The company announced Wednesday that it was rolling out ads on Facebook and Messenger Stories globally, after testing ads since May.

While Stories have exploded on Facebook-sibling Instagram, Facebook said the mobile storytelling format is also gaining major traction on the Facebook and Messenger apps - which combined now have 300 daily active Stories users combined.

Facebook Stories had hit 150 million daily active users in May, whereas Messenger had 70 million last September. Snapchat - which originally pioneered the format - had 181 million daily active users as of August.

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"People are really using Facebook Stories to connect with friends and family because it's camera-first, it's mobile- first and it's very visual," said Liz Keneski, user experience research manager at Facebook.

Facebook is actively trying to get people to make Stories on Facebook - not just Instagram

But people aren't just gravitating toward Stories on Facebook and Messenger on their own. Facebook is pushing people there.

The company has given prime real estate to Stories across its family of apps, placing the format right at the top on the Facebook, Messenger and WhatsApp.

It has also been making it easier for people to post Stores of their own, by handing them a suite of simple creative tools like stickers, doodles, polls and AR-powered masks, said Keneski.

And it is is nudging people to use Stories for birthday message and to communicate among its Groups and Events.

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"We want to help people create great stories, we want to kick off meaningful conversations and we want to do everything for Facebook Stories in ways that people are already connecting on Facebook," said Keneski.

The company is also pushing the ephemeral format to marketers

Facebook's founder and CEO Mark Zuckerberg has made no qualms about how big a focus Stories is, calling it "a big part of the future of sharing" on the company's last earnings call. Newsfeeds are getting increasingly saturated on both Facebook and Instagram, after all, and Facebook knows it has to turn elsewhere to maximize profits.

And even though Facebook only began testing Stories ads in a few markets starting May, the social networking giant has been actively pushing the format to advertisers over the past few months.

"Facebook's ad platform (and entire ecosystem) is wildly popular with advertisers, but is becoming increasingly saturated," said Brendan Gahan, founder of Epic Signal. "So it's not surprising that Facebook is rolling out additional avenues like ads in Stories."

Facebook clearly sees an opportunity in trying to replicate the success of Instagram Stories on its other apps. Since Instagram rolled out Stories in 2016, it has attracted 400 million daily users and seen several successful brand campaigns.

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Maria Smith, Director of Product - Facebook App Monetization, said Wednesday that 62% of respondents to a survey said they became more interested in a brand or product after seeing it in Stories, according to Facebook research. "It's easy to drive business results with this format."

It is also starting to drive results

Easy or not, advertisers are welcoming the expansion of Stories and beginning to see results. Both Tentree, an eco-friendly clothing company, and Skout, a dating app, for example, found that adding Facebook Stories to their Instagram Stories ad campaigns resulted in more customer actions at a lower cost.

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Similarly, KFC extended the reach of an Instagram Stories campaign that it ran for its "FingerLickin' Crispy Original Snack Box" in the UK by also running the ads on Facebook Stories to get a bigger bang for their buck.

The addition of Facebook Stories allowed the brand to reach more people at a lower cost without sacrificing quality or targeting control, leading to 33% lower cost per view and 19% lower cost per impression, said the company.

"Combining [Facebook Stories] with Instagram as one Stories buy across all platforms should bring down costs for advertisers in many cases," said Noah Mallin, head of experience, content and sponsorship at Wavemaker, who noted that advertisers are seeing more people complete video ads via Stories than in Facebook's News Feed.

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Still, not everyone is convinced of the viability of Stories outside of Instagram. There's a reason behind the company combining the number of daily active users on its flagship app and Messenger, as Facebook Stories by itself had just about 150 million daily active users as of May.

Some buyers were not convinced that Stories on Facebook had reached critical mass either.

"Facebook, Messenger and WhatsApp Stories don't have nearly the same cultural impact as Instagram Stories yet, so it might take time for those placements to become feasible," said Ryan Kovach, paid social specialist at Social Outlier. "We've been testing Facebook Stories as a placement, but right now, the traction isn't there."

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