POV: Instagram Ad Program
Mindshare Point of View: Instagram is continuing its evolution as a social ad platform by extending its visual based ad program to three new countries (Australia, Canada and the UK).
Instagram is maturing quickly. It launched in Oct 2010 and less than two years later (April 2012) was bought for a staggering $1 billion by Facebook. Fast forward to Nov 2013 and Instagram opened advertising to a small group of advertisers and now has plans to extend this to other markets. During this time its scale has continued to increase. In April it claimed a global user base of 200 million users a month, up 50 million from six months prior. This all adds up to an exciting new scalable social ad platform.
Instagram is looking to capitalise on its growth, but not at the expense of its growing audience, with strict controls on the style of ads shown. Initial advertisers were encouraged to draw creative inspiration from the community and create ads that were engaging and felt natural in people’s feeds. Advertiser attempts to date reflect this approach and overall this is a good thing. It’s positive that Instagram has a strong composition (over 50% in the US) of the desirable 18-34 age group*. It’s also good that initial data suggests that some brands are seeing lifts in ad recall measures** and this may not be unrelated to research which indicates 65% of people are visual learners***.
Still there are some factors to be aware of. Stylistically Instagram is aiming for a perfect native ad solution. It’s likely unattainable in the long run as pressures to increase ad volume come into play but is initially a good goal to set. Even with all advertisers currently aiming for a highly stylized look, some are struggling to make their brand relevant in this environment, as McDonald's found out to their cost this week when they received 1,941 comments from users in the US, many of which were negative from individuals who were annoyed by seeing a McDonald’s ad in their newsfeeds.
This leads us to identify two factors which brands sometimes forget. Instagram is a highly opinionated community which can at times act like an echo chamber. And secondly there is a difference between visual advertising and visual storytelling. Learning how your brand best operates in this type of environment is only gained by experience and active learning. Additionally tests require a significant investment.
Most brands need to better understand how they can succeed on visual advertising platforms like Instagram. Three core reasons lead us to recommend action: 1) Consumer to consumer communication is increasingly being done visually. 2) Social channels account for a higher and higher percentage of web traffic. 3) Platforms like Instagram are becomingly increasingly dominant on the mobile screen space.
It’s a big step for many advertisers to understand how their brands translate as a static or animated image, but it is essential in seeking to have conversations with consumers where your brand appears to be part of the Instagram environment and not an unnecessary addition.
*Source: eMarketer, March 2014
**Source: Instragram blog, January 2014 - http://blog.business.instagram.com/post/70498340316/first-look-measuring-the-effectiveness-of-brand)