Instagram will share ad revenue with influencers for the first time, creating new opportunities for advertisers

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Instagram is introducing its first ad option for IGTV, which is also its first foray into revenue-sharing with creators, per Adweek. Instagram has struggled to get IGTV, the platform’s long-form video sharing feature, off the ground. But now, its new creator monetization option could attract more influencers to create more video content for the platform.

Instagram is increasing creator incentives to make content for IGTV, and if it pans out it could boost user engagement with the section. The previously ad-free IGTV has been historically underutilized by Instagram creators who instead preferred to focus on revenue-generating content, like sponsored posts or Stories. But now that some creators can monetize IGTV videos at an attractive revenue-sharing rate — the same as YouTube’s, a 55% cut — more will be willing to use the long-form video features instead of turning to competitors.

In particular, creators could be more willing to repurpose content for IGTV that they’re already creating for their audiences, like livestreams. In fact, Instagram introduced a new option last month to upload finished Live streams to IGTV, which will help IGTV bulk up its currently limited library given that Instagram Live viewership jumped 70% in March. Taken together, Instagram’s recent efforts make creating for IGTV far more appealing than in the past, and if influencers flock to the section their fans will likely follow. 

Higher engagement on IGTV would create opportunities for marketers across both advertising and influencer marketing: 

• Video advertising. For now, Instagram is only testing one limited ad option — a 15-second unskippable pre-roll ad — and only rolling it out to a select group of creators and brands. But the company plans to test more options, such as shorter, skippable ads, before it rolls out more broadly. If Instagram is able to successfully drive viewership to the section, IGTV ads could become a valuable social video format for advertisers. For context, social video advertising has surged in popularity in recent years, nearly doubling from $5.66 billion in 2017 to $10.67 billion in 2019, per our estimates.
• Influencer marketing. More engagement across IGTV would provide marketers with a relatively new influencer marketing opportunity on Instagram. A new channel within Instagram is beneficial given its already outsized importance for influencer marketing: Nearly all (97%) US marketers who use influencer marketing planned to use Instagram in 2020, according to a December 2019 survey by Linqia cited by eMarketer. 

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