What metrics would you look at as a product manager for Instagram ads?

Structure brief Clarifying Questions and Assumptions

Define the Product

Who is the user segment here (Target Group)

What are the Core Actions?

What is the Goal?

“Instagram serves as a platform for people to connect, and ads are a catalyst that boost the reach of the people or the product to a wider audience”

What Ads are we talking about here?
-> Story Ads?, Threads?, Posts? Paid Partnership tags?

✅For this conversation, let’s assume we’re talking about the stories and posts

User Segments

1. The recipients of the ads

2. The senders of the ads, Advertisers

          What are the Core Actions?

Ads Reached-> Ads Viewed->Ads Interacted (Clicked, Shared, Saved), Ads Converted, ROI

For Businesses

1. Reach per rupee/ money spent

2. Impressions per money spent

3. Clicks/CTR 

Acquisition/ Activation

• How many users/businesses have used ads?

• Unique Impressions

• Total impressions

Conversion

• How many users have had more than 1 ads?

• What channel works the best in ads? (Stories, Posts, Suggestions?)

• What ad types work the best? Duration, time, etc

• Unique Conversions per impression

• Total conversions per impression

    Engagement

• Swipe from the ads

• New Followers initiated from ads

• Increase in Likes per # impressions

Revenue

• Ad revenue from impressions (Cut by Channels like stories, posts etc)

• Ad revenue from CTRs

Guardrails (Attrition)

• People who clicked ‘Not Interested’ 

• Reports from the ads

For users

The idea is to understand the value that it is bringing to the users without which the product is not bound to success

-> Ads clicked (to understand if the ads shown are relevant enough)

-> Ads per user per session (To gauge if we’re showing optimal count of ads and not being too noisy)

-> Impact of ads per session on session length (Assess impact on engagement)

-> New networks formed via ads (eg followed new people/businesses)

-> Likes per ads shown, similarly comments and shares per ads shown, shares and saves (To understand the user interaction with the ads)

1. My understanding of Instagram and Instagram ads

Instagram is primarily a social media platform that helps people share snippets of their lives and talents with the world. The content can be shared in the form of videos and photos through Stories, Post, and Reels. 

Instagram ad is one of the major revenue sources of the platform using which people increase the reach of their content by setting up relevant demography and geography on their ads. 

Question to the interviewer - Is my understanding of the platform and the ad correct?

2. Defining product goal

Instagram ads can have multiple goals based on the phase we want to focus and the user category we target. The intent to create an ad would be awareness (of a content piece of a creator or a product of the brand) which will further lead to engagement (interaction with the ads, time spent on the platform) and it will ultimately tie up with revenue (revenue generated through ads for the platform and purchases done for the brand).

Questions to the interviewer - 

a. Do we want to focus on any one goal or overall journey of the ads? Overall journey

b. Do we want to consider ads on stories, posts, reels or all of them? All of them

c. What platform to consider - web, app or both? App

d. What OS to consider - Android, iOS or both? Both

e. There are 2 parties involved in this feature - The platform and the advertiser. Should we look at the metrics for both of them or any one of them? The platform

3. User journey

Advertiser

1. The user logs in

2. Decides to create an ad 

3. Adds the creative (video or a photo on story or post or reel)

4. Adds the budget, target audience and geography

5. Makes the payment and ad goes live

6. Users start interacting with the ad

Content consumer

1. Logs in to their Insta account

2. Scroll through their stories and post

3. Interact with the ads (like/comment)

4. Visit creator's page

5. Clicks on the buying option on Insta store

6. Makes the payment

7. Returns to her feed

4. Metrics for the platform

All the ad metrics will be looked at as comparison between post and stories and also as an overall performance of the ads.  

1. Total impression on ads (on Day 1, on W1, 0n M1)

2. No. of impression on ad per user (on Day 1, on W1, 0n M1)

3. No. of return users on ad (on Day 1, on W1, 0n M1)

Engagement (when the user like or comments on the ad)

1. No. of likes on ad (on Day 1, on W1, 0n M1)

2. No. of comments on ad (on Day 1, on W1, 0n M1)

3. No. of user who watched the ad have an increase in time spent on the platform

Conversion (when the user clicks on the ad to know more about it)

1. Total CTR on ad

2. CTR/ user

3. CTR/user on day 1 vs CTR/user on week 1

4. Unique no. of page visits through ad

5. No. of purchase through ad

Revenue (when awareness and conversion result in revenue for the platform)

1. Revenue through ad impressions

2. Revenue through ad click

3. Distribution of ad revenue through geographies

4. Distribution of ad revenue through demographies

Attrition

1. No. of people who reported the ad

2. No. of people who closed the ad

5. Prioritisation of metrics

The ads metric can be prioritised based on the goal which we set as awareness, engagement and revenue at the start of the exercise. 

Based on the goal, 1&2 of Awareness are very important. They will signify the amount of exposure of the ad.  1&2 of Engagement metric will establish how the ad is being perceived by the users and its impact. 1,2,4&5 of Conversion are important to understand the true appeal of the ad that pushes people to know more about it. All 4 Revenue metrics are important to understand and optimise the ad better. First Attrition metric will provide details on why the ad is not sitting right with a part of the audience.

6. Summary

We talked about the platform and the role of the Ad to set a clear expectation of the feature. This lead us to defining goals (awareness, engagement and revenue) and user journey for the same. Then we indulged into looking at the metric for each phase of the user journey and prioritising it on the basis of the goal we have set for the feature. As a conclusion, awareness metrics will be looked at in detail to understand the ad's performance. It will also help in understanding if there is any improvement in the top of the funnel on Day 7 vs Day 1. 

Then engagement metrics will help in understanding the triggers across the geographies that are triggering users to interact with the ad and finally pushing them to make a purchase.

Revenue metrics will be looked from the perspective of optimising the ads to generate more money from it. And also to identify the part of the strategy that is working and double down on it.

Instagram ads – very important revenue stream for meta. Success of this feature decides the money they are making. Instagram mission is to connect people globally, it’s a social network platform which has evolved to serve many kinds of needs of user. For some people, it’s their full time profession as well.

Stakeholders involved in Instagram ads are – advertisers/companies , general users of Instagram.

The features for Instagram ads includes:
post an ad – timeline or story

View an ad

React on ad

Click on ad to redirect to website or app

To measure the success of Instagram ads, I would like to focus on how Instagram ads is making the platform more engaging rather than acquisition because it already has a huge pool of people on the platform and their main aim is to increase retention and engagement.

The metric would include –

Post an ad –

a.     # of ad posted

b.     # of advertisers/ companies on platform

c.     # of ad posted/# of advertisers

View an ad –

a.     # of impressions on the ad

b.     # of clicks or reacts on the ad

c.     # of clicks/ # of impression

My north star metric would be –

# of ads posted

# of impression

Guardrail metric would be –

# ad impression/ user

To check if not many ads are shown to a single user – basically a threshold to ads / user in order to not frustrate the user with loads of

Structure for my answer:

I'd like to start by confirming my understanding of how Instagram works and who the key personas are. From there, it'll be easier to define the key metrics to track.

Advertisers use Meta Ads Manager to create ads and buy awareness, engagement, and conversions to grow their business/brand etc.

Users see ads on a number of channels within the Meta ecosystem, ranging from Facebook Newsfeed to Instagram Stories and Reels to Messenger, etc.

Ads can lead all the way to conversion within the Instagram app (i.e. DTC clothing brand can run an ad that a user sees/clicks and then purchases the product without ever leaving the Instagram app).

For this question, we want to focus on defining metrics to track specifically for Instagram ads.

Goals / the why:

The goal is to attract new advertisers and keep advertisers on the platform, spending more money over time, while keeping users happy with the experience and not feeling inundated with ads, no matter how relevant they are. Advertising revenue is down globally, and as Meta's main revenue source, it's important to trend this back up so that Meta can continue to work on its mission of connecting the world. Public opinion typically does not like ads. An example to illustrate this would be the dominance of subscription ad-free streaming services as opposed to ad-supported ones (i.e. Spotify over Pandora, Netflix over Crackle).

Questions:

Do we want to focus on ads placed in Feed, Stories, and Reels? Are there any Instagram ad delivery channels I'm missing?

How many metrics should we focus on?

User Journeys:

Advertisers:

1. I select an ad goal

2. I enter my budget

3. I create my ad asset

4. I configure my ad placement (Instagram)

5. I target my ad

6. I launch my ad

7. I measure my ad

8. I optimize my ad

9. I stop my ad

10. I run a new ad

User:

1. I see an ad

2. I click an ad

3. I browse products

4. I share a product

5. I select/configure/customize a product

6. I add product to cart

7. I view cart

8. I enter payment and shipping info

9. I confirm and complete payment

10. I receive my product

11. I use my product

12. I write a review

13. I purchase another product from the seller

Metrics to track:

I'd track 2 success metrics and 1 guardrail metric for each persona. I'll base my selections based on the goals we outline and which actions are highly correlated with those goals.

Advertisers:

Output metric #1: Monthly advertising spend

Input metric #1: % of campaigns that reached the expected outcome

Guardrail metric #1: % of new advertisers that advertise on Instagram longer than 3 months

Users:

Output metric #1: ARPU

Input metric #1: Ads viewed per session (this metric is likely the most correlated with user satisfaction and retention)

Guardrail metric #1: % of repeat users within a specified time period

Summary:

I would track both advertiser and user metrics for Instagram ads to know if we're headed in the right direction. Each group would have an input, output, and guardrail metric.

Instagram is a social media platform that allows you to post short videos,images.there are basically 3 types of users-

1.creator

2.viewer

3.advertiser(business people)

The goal of this feature is to generate more revenue also providing advertisers a platform to sell their products.

User Journey:-

1.user comes to the platform

2.sees the content posted by others/he himself posts some content

3.sees ads clicks on the add àgetting interested àbuys the item

Listing the metrics:-

Activation:-

A1: % of people who have used this feature at least once.

Engagement:-

E1: number of ads clicks per user

E2: number of orders initiated vs completed

E3: number of ads uploaded by advertiser

Referral:

R1: number of people who have referred any item to their friends

Retention:

RE1: % people used this feature in this month vs previous month

RE2: % of advertisers who uploaded any kind of ads this month vs previous month.

I would like to prioritize E1,E2,RE1,RE2.

Instagram ads

user journey through ad

user scrolls through feed, user behavior recorded, ad is inserted into feed, user short impression, user long impression, user click, user user lands on the page, user saves it, user plays the ad, the user reads the comments, user likes , user shares it 

(ad can placed in 

fb/instagram journey through ad

place right ad, place at right gap, share right data to the marketer

marketer journey through an ad

place right amount of content according to fb/instagram restrictions, fb/instagram best practices, campaign data access APIs, campaign analytics resources, budgeting

metrics 

i will look at the metrics from user journey and later if i feel i didnt cover the metrics, i will look at other journeys

is it okay to create metrics at overall instagram ads level ?? or am i missing any subtleties ?

impression metrics

1. % of impressions (per post per week)
2. impression time (per post per week)

1. % of clicks (per week)
2. % of clicks on video
3. % of clicks on photo
4. # of comments (per post per week)  
5. # of likes 
6. # of shares
7. avg user engagement time per week

1. % of successful page landings (per week)
2. % of fully watched videos

1. # of ads per 2 min of scrolling 
2. # of ads per 2 min of scrolling vs avg user engagement time

1. user engagement time
2. % of clicks
3. impression time WoW

Product:

Instagram ads is a product under the instagram ecosystem that helps the sellers/Marketers post ads to a wider community with the same interest to sell/Market a physical or digital product

Users and value proposition

Ads Creator -  They get to reach a wider community in instagram and get new leads and grow their business

Buyers - User get to see new and interesting ads based on their interest and choose one that can benefit them  in purchasing new and unique products in line with their interests

North Star Metric:

I would like to focus on the content consumers perspective

Total Number of clicks on a CTA in an ad (example:  clicking the install button for an app advertising, Clicking a book now button and filling in a form) 

Reason for choosing this metric - It provides value to all the stakeholders 

Supporting Metrics:

Adoption

⦁ Total number of users who clicked the ads for the first time 

⦁ Total number of users clicking the ads demographics wise 

Engagement

⦁ Number of clciks to CTA vs CTR per user per week (A user Might sometmes click an add however after seeing that he needs to fill in some information he might pulll back by clicking back button

⦁ CTR of Ads

⦁ Average number of likes per ad

⦁ Average number of shares per ad

⦁ Average number of saves per ad

⦁ CTR based on the ad type

⦁ Number of Ads that were clicked below the threshold level

Rentension - Total number of users contributed to more than 1 ad clicks in a week

Monetization

⦁ Average CPM, CPA and CPC

Counter Metrics

1. Number of ads that are reported

2. Number of ads that are hiden for view

Tradeoff

1. User get navigated to a different site ane this can stop the user from spending time in instagram  - Track time spent on insta

Understanding the Problem

Before we dive into this, let's briefly spend a minute establishing a common understanding of instagram ads. Instagram as a product let's users view and share photos and short form videos. Interwoven amongst these user posts are ads which themselves are either photos or videos and look very similar to user posts. In addition to the standard feed ads, advertisers can also pay for story ads which will be woven inbetween the stories of users. There are also sponsored posts where users can create a post on behalf of an advertister, but for the sake of this discussion I'm going to exclude those.

In order to properly set the stage for this question I think it's important for us to examine this feature, Instagram Ads, in the context of the parent company and it's mission. Facebook's mission as a company is to bring the world closer together and give people the power to build community. By being targeted and inserted natively, Instagram ads furthers this mission statement by enabling advertisers to connect with users in a way that is ideally unintrusive. While obvious it is worth stating Facebook is a for profit company and that ads generate revenue.

Metrics

When it comes to Instagram ads there are two distinct user groups, the users who will see the ads and the advertisers themselves. Each of these groups will have different success metrics so we'll brainstorm some metrics for each of them.

Users

Let's examine metrics through the different steps of the customer lifecycle:

• Awareness, Activation, and Adoption aren't going to be important for users as we the platform control the how ads are displayed to these users.
• Engagement: Average number of ads viewed per user, Average time spent viewing ads, Average number of ad clicks per user.
• Retention: % of users who viewed 20 ads last week and who came back and viewed 20 ads again this week
• Referral: This is kind of niche and I'm making the assumption that it isn't a common action, but we could measure the average number of users tagged in the comments of an ad.
• Monetization: Average CPM per user. Not all users and audiences are made equal. A young professional has a lot more disposable income than that 16 year old babysitter.

---------

Advertisers:

• Awareness, Activation -> Going to ignore these two, IG ads is a pretty well known product at this point.
• Adoption: # of advertisers
• Engagement: Average number of ads per advertiser
• Retention: % of advertisers who spent $200+ on ads last month who also spent $200+ on ads this month
• Referral: Going to ignore this as it isn't as critical. This would be like measuring how many advertisers recommended us to other advertisers.
• Monetization: Average ad spend per advertiser, average profit per advertiser

Prioritization

I think each of the above metrics has it's own purpose, but if we needed to distill this down into a few KPI's I would focus on the following.

In terms of users, I think one of the critical things we really want to measure is how much are we annoying our users by showing them ads. No one really wants to see ads but as a for profit company we need to make money which is why we will show ads even though it provides a worse user experience. 

By monitoring the % of users who viewed 20 ads last week and who came back and viewed 20 ads again this week we will be able to successfully measure and monitor our users' sensitivity to being shown ads. If we see that our retention rate is holding steady at a high rate we could even consider making the decision to increase the frequency with which we show ads to users. 

In terms of advertisers, I think the most important metric to measure would be the average ad spend per advertiser. As we mentioned above this is primarily a money generating feature. Average ad spend per advertister gives us both indicitation of how much revenue we are making from this feature as well as how much value advertisers are getting out of it. Whether or not advertisers are spending more gives us insight into whether or not our ads are effective.

Downsides

While the above two metrics provide us great insight into instagram ads, no metric is perfect so I think it's worth spending a little bit of time calling out their respective flaws.

% of users who viewed 20 ads last week and who came back and viewed 20 ads again this week:

• This metric doesn't give us much insight into how different types of ads impact the user experience and their tolerance for ads. For example, users might greatly prefer video based story ads over interstitial display ads in the feed.
• This also doesn't give us insight into how well our ads match our users. We might be forcing fitness ads into the feeds of our users who are content couch potatoes or showing your grandmother the latest and greatest BMX bike. 

• This doesn't give us much insight into the profile of the advertisers. For example, small businesses with smaller more localized ad spend could be having a terrible experience but a few large national brands could be having a great experience and drawing the metric upwards.
• I also think an argument could be made that this doesn't really tell us about the effectiveness of our ads in driving business for our customers. Are advertisers spending more on ads because they are really effective and they want more business? Or are they spending more on ads because they aren't as effective as they could be and they need to spend more to get a result?
• We also don't know much about the quality of the advertisers. Are we advertising crypto pump-n-dumps to our users because advertisers are willing to pay us?

Clarify:  

I am assuming that we just launched Instagram ads and we are trying to figure out how to measure the success of Gram ads? Sure

Are we talking about the ads we see while on the stories or are those the ads shared on feed? Feed.

The product: Instagram is a social media, and e-commerce platform where you can have the engagement with the videos/pictures of the people and it has 90-9-1 rule.

90% of user of the platform just check the content

9% have the engagement with the content

1% create the content  

In addition, it can be used as a ecommerce platform since  the brands can advertise their products on this platform.

Therefore, if I launch ads on a social media and ecommerce platform, I would expect engagement with ads and conversion rate to understand the success of this platform.

User journey:

-          user to open the feed and scroll down

-          while scrolling the ads are shown in between the posts

-          User can read the ads, like it, share it on their story, send it to the friend, save the ads, click the link go to the website of the product or their insta page

-          They can purchase the product

What specific metric do I need to set?

Brainstorming

-      How frequently should I show the ads to get the engagement( click or seen)

-      How can I know that which ads will be the right ads for the user?

-      Is there any inappropriate  ads content?

-      How many people purchased the product that I advertised?

-      Any report/complaint for the content that I share?

-      How many people shared the ads?

-      How many people added the comment to the ads?

These are the questions I would ask if I launch ads in Instagram.

Here are the metrics that I would keep in order to understand it:

-      Engagement of the user if I share ads in every 10 mins/ 20 mins or after every 20 posts/ 30 posts ( this is important bcz we would like to have the engagement on the ads but at the same time we don’t want to overwhelm the user with so many ads)

-      time spent on the ads  ( does user look into the content or just pass it quickly? So that I can understand if they are interested in the ads or not)

-      click rate ( did user click the ads to go into the ads content?)

-      conversion rate of the ads ( how many ppl who clicked the ads content purchase the product? )

-      any reported/ inappropriate content?

-      #of users shared the ads on their story

-      #of users shared the ads with the others

-      #users saved the ads to look into it again

As an MVP: I would set my metrics around the engagement and revenue in order to understand the success of the ads.

Clarify:

•  Are we supposed to include video ads as well ?

• Are we including the ads posted on insta stories as well?

Note: I am assuming we are only talking about both one’s which are posted as a post as well as the ones which are posted as their instagram stories.

Feature Description: Instagram ads are the medium  to advertise  your products , events, services , personality etc by posting a video or content with photo or simply photo. 

 Business Goals - 

1. Marketer: Goals of marketer are many including-

• Awareness regarding the product, event, service, personality

• Increasing the traffic on website

• Sales Conversion

• Referral

2. Instagram Business Goal: To earn revenue from marketers and keep their users well informed about new products and sercives.

User journey: There can be two user journeys depending upon the type of user. 

User-1: The one who post an ad

User-2: The one who gets to see the ad in his/her feed or story.

User-1

• User will post the ad either post or Insta stories

• Might tag business partners or concerned person

• Will come back to check response or interact  voluntarily  or using notifications

• Will analyse the impact of ad on its goal

User-2

• User could either choose to ignore or read but choose to not  respond

• If user seem to consider that advertisement- would like or if in hurry could choose to save to see later

• If choose to interact

- could comment, 

-share with someone else to discuss further

-If its on his story can even share as post, send a message or query, give reaction, 

• Take actions immediately or later - 

• Going to the website 

• Adding to the cart

• Making the final purchase

• Follow or subscribe if its a subscribe request etc

METRICS

I will go by standard stages (AAAERRR)

Awareness : 

• # Average No of ads posted monthly ( after the rollout of features)

• # Average seen on ad posted as story out of total followers for that marketer/company

• #Average impression for an ad in a day

Acquisition/activation: 

• # Average number of Likes  per ad  post ( Reaction if its a story)

• # % of Instagram users who saved the ad for future reference who happened to see or like

• # Average number of click on CALL to action button per advertisement

Engagement:

• #Percentage of people who posted an ad tagged someone

• # Average no of comments per advertisement

• # Avg no of times an ad is shared by user either as his post or to someone else

• # % of people who send personal message ( When ad is shared as his/her story)

Retention 

• No of advertisers who post twice or more than thaT

Revenue 

• Avg revenue earned per advertisement 

• Sales conversion percentage 

• % of people who liked or interacted in any way  end up purchasing 

Referral 

• Avg No of referrals  per ad

• % of people end up purchasing who got referrals 

 Since the goal is to earn revenue or increase awareness or to get the user click on call to action button.  I would go for the following metrics 

• Average no of like per advertisement 

• Average comments per advertisement 

• Avergae no of times an ad us shared 

• Avergae of people who clicked on call to action button 

• Sales conversions percentage 

For Instagram major goal is to get revenue from advertisers 

• Avg No of ads posted monthly 

• No of advertisers who posted more than once