Like the opening sequence of The Fresh Prince of Bel-Air, the social media landscape is getting “flipped-turned upside down” by the ascendance of stories. Well, that may be a bit dramatic, but they are certainly starting to make waves.

Stories are growing in popularity as a mode of sharing and consuming content on social media. In the past few years, consumption of stories has been on the rise — first at Snapchat, then at Instagram and Facebook. The rise of stories has been most impactful at Instagram, where its 400 million daily Stories users now constitute 40% of its 1 billion global monthly active users.

But while stories are popular with consumers, they have been less popular with ad buyers. So far, the format has been difficult to monetize with ads. Snapchat, which popularized the stories format four years ago, still constitutes less than 0.5% of global digital ad spending. And Facebook acknowledged on its Q3 2018 earnings conference call that its Stories ads “currently monetize at lower rates compared to Feed ads.” Case in point, Facebook’s ad price growth was only 7% in Q3 2018 — the lowest since Q4 2016, in part due to the shift to stories.

How social networks, particularly Facebook, manage the transition to greater stories usage will be key to social ad revenue growth in the near-to-medium term. Facebook is undertaking efforts to better monetize stories by promoting its Stories ads. Sheryl Sandberg highlighted Facebook tools such as its automatic placements that make it easier to convert horizontal video ads into vertical ads for Stories. But Facebook still has work to do. David Wehner, the firm’s CFO, said that in terms of the time it will take Stories ad prices to converge with Feed ad prices, “that’s a journey that’s going to take years, not quarters.”

Despite the longer time horizon, Mark Zuckerberg was upbeat, saying, “I’m optimistic that we’ll get ads in Stories to perform as well as feed over time, and that the opportunity will be even bigger, because it looks like Stories will be a bigger medium than feed has been.”

#DMWF Panel Discusses Stories

At first, I was a bit skeptical about stories’ potential, but Zuckerberg could be right. At the recent #DMWF conference in New York, a panel session, “Future of Social: What Marketers need to know for 2019 & beyond,” had me feeling more optimistic about the monetization capacity for stories. I was struck by how enthusiastically the marketers on the panel from companies such as OXO, CoverGirl, and the NYSE are embracing stories to drive engagement. Although they are primarily posting stories organically, it could bode well for future paid promotion.

A lot hinges on Facebook’s product prowess here and whether it can scale its Stories and convince marketers to pay up for Stories ads. If not, Stories may eventually find its way to the heap of shiny new marketing toys that have lost their luster.

For more perspective on the state of social advertising spending, see our “Forrester Data: Social Media Advertising Forecast, 2017 To 2022 (Global),” and stay tuned for an update to this report coming out later this year.