‘Building up a community first’: Instagram Reels has little on offer for advertisers — for now
Instagram has announced its TikTok competitor Reels is launching in the U.S. and 50 other markets this week. The feature, which sits in the app’s Explore section, currently carries no advertising — a deliberate strategy, experts say, for Instagram to cultivate new types of users and content on its app before it attempts to monetize it.
Reels allows users to create 15-second videos, soundtracked by music and edited with special effects. Like the TikTok “For You Page,” the emphasis of Reels is to discover new content and users — including those owned by businesses — can opt to share their reel with the wider Instagram audience.
However, for businesses used to advertising on Instagram and Facebook there are some key differences at launch. An advertising agency buyer said the product hadn’t been pitched extensively to their agency yet.
“Instagram [is] working on building up a community first,” the buyer said.
There are currently no ad formats available on Reels, which could prove a key early point of differentiation with TikTok as Instagram looks to tempt over its users. Advertisers and influencers can’t pay to boost their videos or to have them displayed in the “featured” section, which is hand-picked by Instagram employees. Similarly, there aren’t any branded content tags available for use at launch, unlike within the main Instagram feed, where influencers can signal they have been paid by an advertiser to promote a product.
Elsewhere, while businesses are able to create Reels, much like on Instagram Stories, business accounts won’t have access to music in Reels due to licensing restrictions.
“We are currently focused on making Reels a great experience for people and creators, but are evaluating monetization opportunities for the future,” said an Instagram spokesperson. On the subject of branded content tags, the spokesperson added, “We are planning to integrate these tools in the future.” A specific timeline wasn’t shared.
Advertisers, agencies and publishers will get access, however, to a regular newsletter showcasing the latest Reels trends and creators, according to a person familiar with the plans.
Instagram Reels’ international launch lands at a particularly challenging juncture for TikTok, which has been caught in the intensifying political crosshairs between the U.S. and China. President Trump has given its parent company ByteDance until just September 15 to find a buyer for TikTok in the U.S., or else he has indicated he would look to ban the app, citing national security concerns. The precise details of how a ban could legally work are unclear at this stage. Microsoft has confirmed it is in discussions to purchase TikTok in the U.S. and operate the app there and also in Canada, Australia and New Zealand.
TikTok has acknowledged Instagram Reels is a direct competitor — or “copycat product,” as CEO Kevin Mayer put it in a blog post last week. Speaking on the Digiday Podcast, which was recorded before the Instagram Reels launch, TikTok vp of global business solutions for the U.S. and Europe Blake Chandlee said Reels …read more