With more than 400 million users lapping up content on Instagram Stories daily, the format has become hard to ignore for advertisers. And now they're getting savvier about using the nascent platform, hoping to avoid burning their media budgets on lousy ads.

The likes of Cisco, Smirnoff, Budweiser, and Benefit Cosmetics are using Instagram Stories as a testing ground for ads. Specifically, they have been publishing organic Instagram Stories or making small bets on sponsored ads, seeing which ones users respond to, and then dialing up the dollars on the most effective ads.

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