U ntil this week, if you wanted to use Instagram for marketing, and do it effectively, you either had to build a huge audience organically or spend enough on media to earn a direct relationship with the photo network.
Instagram has been testing its advertising model since 2013 but the opportunity was only open to major brands like Cadbury’s, Waitrose and Rimmel. Now, Instagram’s photo feeds are open to advertisers: this week they announced the launch of an API for its ad system , allowing brands to use third-party ad tech vendors to buy and manage Instagram ad formats on a self-service basis.
Whilst Instagram’s owner, Facebook, and their advertisers are sure to enjoy this new commercial opportunity, photo-loving users may be less enthused.
The benefits to advertisers are powerful: targeting, visual and interactive formats, and data-driven management. Brands can now accurately reach and target younger customers who are increasingly shunning Facebook, and do so exclusively on mobile. At 38%, Instagram has over twice the proportion of 16-24 year olds as Facebook , its audience is growing by 18% year on year , and users are more socially active than Facebook users of the same age.
The high-quality image and video ad formats can cut-through on the newsfeed and are interactive, allowing brands to drive direct sales, app installs or further engagement with the campaign or product. These formats were previously unavailable on mobile outside of Facebook. Brands can now drive media efficiencies too, including automatically managing spend, targeting, bids and results for campaigns with other mass digital media like Facebook ads, pay per click and display networks through digital ad management tools. In short: advertisers should – and will – flock to Instagram.
As with Facebook’s introduction of newsfeed ads, commercialisation of social networks is usually met with a degree of outcry. That’s what happened two years ago, when Instagram was forced to respond to users who feared their photos would be made available for advertisers to re-use. Until recently, Instagram was a much-loved creative and social network, free from both adverts and parents.
However, users shouldn’t worry too much about their platform being polluted. Nor should brands worry about defecting users or declining ad response rates. Instagram has spent a long time perfecting its advertising model, diligently testing not only for advertiser effectiveness but also for consumer appetite.
The last time a company did this at such scale was when YouTube tested its skippable video ad formats. What both companies have in common is a fear that one wrong move could mean their user base migrating to the next photo sharing app, whether it be Snapchat or a new startup.
Instagram’s ads will take a familiar, “native” approach to in-stream marketing, appearing as regular photo posts that just happen to be promoted into consumers’ feeds. Instagram will manage volume, frequency and creative integrity, ensuring that users are not spammed with offer-based advertising.
Advertisers will have to take care too. Like Facebook before it, Instagram could eventually become a cost per action dominated media, with costs escalating quickly if ad creative is not effective. This means it has to be relevant, pleasing and engaging to Instagram’s users. It is a good thing for all.
When you think about it, Instagram ads are actually far less invasive than, say, YouTube’s true-view. “It’s a user ecosystem where you’re part of the conversation and not just disruptive to it,” said Jamie Tedford , CEO of Brand Networks, which placed some of the first API-bought Instagram ads this week.
The new ads will give both users and marketers what they want by introducing action-based formats. Buttons in the Instagram ads will invite users to “learn more”, “sign-up”, “shop now” or “install now”. Not only does this touch every point on the sales funnel, from awareness to purchase – it also allows users to do more without sacrificing the experience they came for. Meanwhile, with the new targeting capabilities, a 17-year-old cycling enthusiast is going to discover new bike images, rather than being pushed Eton Mess recipes. It’s no wonder Instagram claims it is getting 2.8 times higher recall for the more than 400 ad campaigns it tested before going live.
The marketing opportunity for brands is great: Facebook-style data-driven targeting mixed with the visual beauty of Vogue, all focused on a young and socially engaged audience that hasn’t been accessible since the early days of Facebook. So long as brands create relevant, targeted and results-driven advertising, it should be a harmonious relationship for this generation of users and brands.