The Competition Between TikTok and Instagram Continues To Get “Reel”: Instagram Announces Its Global Rollout of Reels Ads

On June 16, Instagram announced the global launch of Reels ads, exciting news for the Facebook partner who has seen growing popularity with their organic Reels, which dropped in August 2020. 

“We see Reels as a great way for people to discover new content on Instagram, and so ads are a natural fit,” explained Instagram’s Chief Operating Officer, Justin Osofsky. “Brands of all sizes can take advantage of this new creative format in an environment where people are already being entertained.”

In a clear push to monetize Reels, TikTok’s short-form video competitor has officially rolled out ads to all countries, following test phases in select markets around the world, including India, Brazil, Germany and Australia in April, and then Canada, France, the UK and the U.S. late last month.

This rollout should come as no surprise, as it follows suit with the social e-commerce “wars,” where platforms are racing to keep up with each other (Think: Instagram’s Live Rooms / Clubhouse). It also comes at a time when nearly all major social platforms are introducing new features to help monetize organic content and encourage in-app shopping.

However, Instagram’s latest news begs the question, How will this compete with TikTok ads?, which also offers full-screen, vertical-oriented ads to its growing audience of brand-loving, content-consuming users. While it’s still too early to tell which will earn greater success and garner stronger advertiser loyalty, here, we look at the new offering and dive deeper into why it’s a smart choice for advertisers.

What Are Instagram Reels Ads?

While Instagram is keeping most information, including Reels ad’s performance metrics from test phases and its algorithm, under wraps, here’s what we know. 

Reels ads will play in-between Reel’s individual organic content. Once a user taps into a Reel (from Stories, Feed, the Reels Tab or Explore), they will enter an immersive, full-screen viewer that shows scrollable Reels ads. As with organic Reels content, ads can be up to 30 seconds in length and people can comment, like, view, save, share, and, ideally, shop from them directly. 

They’ll look just like any other Reel—full-screen, looping between other clips. Ads will be identified by a small “sponsored” tag below the name of the advertiser’s account and feature a large call-to-action to “Shop Now.” Current users of the new offering include big brand names such as BMW, Nestlé’s Nespresso, Louis Vuitton, Netflix, Uber and others. 

But you can expect SMBs to jump aboard the Reels Ads bandwagon in time, and with good reason, too.

Why Should DTC Brands Advertise on Instagram Reels?  

With a global reach of over one billion monthly users, DTC brands can and should introduce Instagram Reels Ads into their marketing arsenal, especially because the platform helps 80% of its expansive user base decide whether to buy a product or service.

What’s more, Reels, in particular, is a destination of choice for brands because, according to the social media giant, “it’s the best place on Instagram to reach people who don’t follow you and a growing global stage where brands and creators can be discovered by anyone.” 

Advertising on this “growing global stage” is especially compelling for lesser-known brands scratching their heads as to how to get discovered, acquire new brand followers, and ultimately convert them to shoppers. 

By leveraging Reels and their all-new ads, these brands can showcase a more personable, entertaining side to them through the full-length, 30-second videos, inspire more meaningful engagement, and become discoverable on a platform with 90% of its users consisting of brand-following consumers.

How Can Advertisers Create Content for Reels Ads?

At this time, Instagram is not offering any creator tools or templates for advertisers to create ads, unlike TikTok. Instead, they are asking them to use preexisting creative that they may have on hand from other platforms or to create them on their own. 

This is noteworthy because it’s critical you create ads that don’t blend with organic Reels, which would make them easy to swipe past. If you don’t currently have creative at-the-ready, be sure to partner with a full-service agency like MuteSix, whose StudioSix offers custom creative solutions tailored to your needs. Our Influencer Marketing team can also help you with your influencer marketing strategy, which is especially important on a channel centered on creative, entertaining, and engaging content that allows followers to engage with brands in fresh, new ways.

How Do Reel Ads Compare to TikTok Ads?

It’s true, the two platforms offer ad placements that are similar in look and feel, given their full-screen, vertical format. And, they both have incredible potential for DTC brands. However, they have a few key differences, including more robust and easy-to-use content-creating features, which make one more preferable to brands over the other. 

One of the key differences, however, is demographics. While comparable in size on a global level, TikTok tends to skew younger (mainly reaching the 18-24 age group), which is a potential deterrent for brands looking to target an older audience beyond Gen Zers. Instagram, on the other hand, reaches Millennials in the 25-34 age group, which also tends to be a higher-income audience. So, depending on your product and the consumer you’re hoping to capture and convert, these discrepancies in audiences matter for brands.

There’s also the long-standing success rate of Instagram, in general, compared with TikTok which is still relatively new in the game albeit successful thus far. According to Josh Henry-Hicks, VP of Paid Social at MuteSix, “For Instagram, it’s all about the ad-targeting, the platform maturity, and the algorithm.” He continues, “There’s no comparison in terms of the performance and results Instagram can drive for DTC brands over TikTok.” 

So, while this may be Instagram’s foray into TikTok-like ads, they have incredible potential thanks to the platform’s historical track record, as well as its advanced targeting mechanisms and tracking capabilities to find the right customers, at the right time. Whether that happens with Reels ads specifically, however, remains to be seen.

A Final Word: Reel Ads Are a Sign of More In-App Purchasing (and Competition) to Come

Clearly, Instagram’s expansion is part of the broader Reels monetization push, which is nothing revolutionary in the world of social e-commerce. For years, nearly every social platform has introduced new features to place in-app shopping front and center, including, most recently, Twitter’s Ticketed Spaces and Super Follows and 15-Second Views, Instagram’s Drops, Google’s Shopping Graphs, Pinterest’s Shoppable Pins, as well as YouTube’s Brand Extensions, among others. 

It’s thus no surprise that Instagram is continuing to monetize its increasingly popular Reels, and we should expect the Facebook partner to follow this same trajectory so as to not only keep up with the competition, but to help DTC brands become more discoverable and shoppable. 

Here at MuteSix, we encourage brands to consider a more omnichannel approach and avoid choosing any one platform over the other. The same applies for Instagram’s Reel ads and those offered on TikTok. For advice on how to diversify your ad spend, create a holistic marketing strategy, and produce the most captivating content for each platform, reach out to the experts at MuteSix today.