The Impact Of Instagram Stories, Olympics And Political Spending On Social Media Stocks

The world of social media is evolving on a seemingly weekly basis, and investors in the space must keep up with the latest trends to stay ahead of the game. SunTrust analyst Robert "Bob" Peck recently discussed three topics that have had a major impact on the social media space in the second half of 2016.

First, Facebook Inc FB’s Instagram launched Instagram Stories on August 2, and the impact so far hasn’t been particularly impressive. According to Peck, Instagram was adding roughly 10 million users per month heading into August, but its growth rate slowed on the month. He added that August is typically a difficult month for social media and noted that Twitter Inc TWTR recorded negative user growth on the month.

Related Link: Here Is Every Twitter Takeover Rumor Of 2016

The Olympics were another major social media event that Peck has been monitoring. According to the data, overall digital video consumption of the Olympics was up significantly even though overall online-plus-offline viewership was down. Millennials were mostly responsible for the viewership shift, and Peck noted ad spending relative to digital viewership is still well behind the rates associated with traditional TV spend.

Finally, the next major event for social media stocks will be the weeks headed up to November’s presidential election. SunTrust projects that total presidential election ad spend will reach $1.1 billion. As candidates try to appeal to younger voters, Peck predicts that a large percentage of that spending will go to social media platforms like Facebook, Snapchat and Twitter.

SunTrust names Facebook and Alphabet Inc GOOG GOOGL its top two digital media stock picks.

Full ratings data available on Benzinga Pro.