How Much Is an Instagram Story Worth?

“The traditional hotel photo shoot is a thing of the past.”

Jeremy and Tom Jauncey were among the first to turn being good at Instagram into a travel advertising and marketing business. Jeremy launched the travel-themed Instagram page Beautiful Destinations in 2012 and was soon joined by his brother. Within a year, the account had 1 million followers. By last August it had grown to almost 8 million. The brothers have built a portfolio of customers in the travel industry, mostly hotel chains and tourism bureaus, who pay to be touted to Beautiful Destinations’ enormous number of followers.

Source: Beautiful Destinations

Even with that success, Beautiful Destinations had to diversify to grow. In August 2016, Instagram introduced Stories—its version of Snapchat. The feature incorporates short videos and images that disappear 24 hours after posting. Stories allows for a mix of posts: video clips as well as shots of a daylong excursion along Amsterdam’s canals, for instance, rather than a single still. Since January, Stories have linked to client websites, a marketing tool regular Instagram posts don’t offer.

The brothers saw an opportunity with Stories to sell clients such as Hilton Worldwide Holdings Inc. and Marriott International Inc. on new services to increase engagement on their own accounts. “We have a vision of the start, the middle, and the end before a Story goes live,” Jeremy Jauncey says of the way Beautiful Destinations would produce a client post from high-resolution images and video. “That you can share an image that makes someone want to go to @hiltonmoorea”—the handle for a client, the Hilton Hotels & Resorts complex in French Polynesia—“and then easily take them straight to a booking page, that’s closing the gap between social media interactions and actual transactions,” he says. That’s one reason the Shangri-La Le Touessrok Resort & Spa in Mauritius hired the company. The hotel wanted to better exploit Instagram. “Their photos and videos can dramatically affect our feeds,” says Kishan Chandnani, Shangri-La’s director of brand marketing.

In the fall, Beautiful Destinations posted a series of Instagram posts and a Story from the Empire State Building for New York City's tourism board, NYC & Company, that registered 3 million likes, comments and views for the client’s @nycgo handle in less than a week. Beautiful Destinations has been garnering 30 million weekly views since Stories was unveiled; individual story posts have been averaging 5 million views. Before that, videos were a smaller part of the business.

Clients are drawn to the brothers’ ability to cultivate brand awareness. Marketing costs are lower, too, compared with those of traditional television and print advertising. “The traditional hotel photo shoot is a thing of the past,” says Hoyt Harper II, a former senior vice president for Starwood Hotels & Resorts’ Luxury Collection. “Sending professional photographers to destinations is very expensive.”

Plus, the reach of an image posted—to millions or even thousands of people—is something that isn’t financially feasible with traditional marketing methods, says Jason Clampet, the editor-in-chief of Skift, a travel industry trade publication. “Social has given power to new brands like Beautiful Destinations that understood the power of sharing early on,” he says. “They’re focused on speed, on user-generated content, and on getting that emotional ‘I want to go there’ response. They’re doing something well that traditional agencies can’t deliver that’s not just access to their followers.”

Beautiful Destinations says clients have paid for annual contracts anywhere from $50,000 for photo projects to $1 million for bigger video-based campaigns.

The brothers are working with clients to figure out who exactly among their followers is doing the liking. They’ve hired a team of data scientists to build an analytics program, set to begin by yearend, that will break down the interactions on an image by demographic. “Creating content alone isn’t a massive business,” Jauncey says. “Clients want to see that there’s a meaningful return on investment against social media communication, and that’s what we’re placing our bets on.”

The bottom line: Beautiful Destinations has been averaging 5 million views per Story since Instagram rolled out the Snapchat-like feature in August.

(Corrects information in the fourth paragraph about the client, its Instagram handle, and the period of time in which engagements were measured.)
    Before it's here, it's on the Bloomberg Terminal.