Are you using Instagram for your business?
Have you thought about advertising on the platform?
Instagram just began offering paid advertising opportunities through select developer partners. In the coming months the platform is expected to create a Facebook-like self-serve option for any budget.
In this article you’ll discover findings from studies about Instagram’s current reach, and the potential to reach targeted audiences with ads.
Evolution of Instagram Ads
In December 2014, Instagram reported its user base hit 300 million, 64.2 million from the U.S. alone. More exciting to brands and marketers than strict user numbers, however, was the engagement rate. Instagram users like, comment and re-gram at a rate of between 3.1% (Socialbakers research) to 4.2% (Forrester research). Comparably, Twitter and Facebook posts have engagement rates of .07% and below.
Discover what research shows about Instagram’s ad rollout.
With population and engagement numbers like these, of course brands wanted to get access to Instagram audiences. For three years now, Facebook has been working on the correct advertising mix for Instagram. Until June 2015, businesses could only reach Instagram audiences by posting content, commenting, sharing and liking consumer posts. Instagram’s few brand partners could place sponsored posts, much like Facebook’s boosted posts. Strict ads, however, were not available.
In June 2015, Instagram rolled out the call-to-action buttons Shop Now, Learn More and Install Now, which take users to mini-apps within Instagram, rather than brand websites. That way, users stay on Instagram once they’ve shopped, learned and installed.
Now Instagram has provided advertising opportunities for all brands… provided you enter via one of their developer partners. These partners include Ampush, Brand Networks, 4C, Kenshoo, Nanigans, Salesforce Marketing Cloud, SocialCode and Unified. They require a minimum spend, so if you’re a small business, you won’t be able to take advantage of Instagram’s new advertising opportunities until later in the year.
Explore Instagram’s ad platform. Image: Placeit.
Facebook’s advertising followed the same path: It offered advertising to certain brands and then eventually made ads user-friendly enough that a developer intermediary was not needed.
If you don’t have the budget to utilize developer intermediaries, now is a good time to familiarize yourself with Instagram so that when the ads roll out to everyone, including small businesses, creating and posting an ad will be a simple task. On its blog,Instagram explains:
Instagram ads will be available to advertisers of all types later this year. We are currently testing self-serve buying interfaces and APIs with a small group of partners, and we expect to make them more widely available over the coming months.
With the context understood, small- and medium-sized businesses must evaluate whether Instagram is the right place for them. The following research will help with these decisions.
#1: Instagram’s Access to Facebook Data Offers a Significant Opportunity
Lighting a fire under many marketers, Instagram currently doesn’t have the pay-to-play platform that Facebook instituted in spring 2013. Before that point, companies that had built Facebook audiences had the luxury of getting each post to nearly every earned follower. Facebook then dropped organic reach to 6% and lower, forcing companies to pay to boost posts for as little as $1 per day if they wanted to reach more of their earned audience.
Instagram benefits from Facebook data. Image: Shutterstock.
Conversely, on Instagram, for the foreseeable future, each post will reach close to 100% of its earned audience… free! Well, free except for the time costs and any costs involved with Instagram’s partners or other outside consulting. When Instagram will go to the Facebook-style pay-to-play platform is unclear. Until that time, you’ll save significant marketing dollars experimenting with which content wins the most attention, engagement and likes.
This said, at this time Instagram is only allowing ads through the developer partners mentioned above. Because most small businesses spend less than $500 per month on ALL marketing (and because we expect developer partners to require more than that just for Instagram), smaller shops remain locked out of the platform until the self-serve option becomes available.
If you have a larger budget, on the other hand, you have an amazing opportunity to reach and engage a large, young audience quickly, through the partners listed above. Not only do you get the channel without a charge, but you also get access to parent company Facebook’s unprecedented consumer data and narrow targeting tools. In their Intelligence Report: Instagram, L2 explains that:
…management has ensured the mother ship remains relevant by handcuffing Instagram’s targeting and direct-response capabilities to the parent platform. Ad packages across both Facebook and Instagram, leveraging previously eschewed data-sharing practices, are the marketing world’s nuclear fusion.
“Nuclear fusion?” Let’s take a look.
Instagram has outpaced competitors, and market analysts expect this momentum to continue. Recent research from eMarketer indicates that over the next three years, Instagram will increase its lead on Twitter, Pinterest and Tumblr. By 2019, 33.6% or 111.6 million of U.S. Internet users will be active Instagram users. By that point, Facebook will have leveled off for several years with 52.8% of U.S. Internet users consistently patronizing the platform.
Despite coming onto the scene years later than Tumblr and Twitter, Instagram will become the highest-traffic platform of all except Facebook.
Increased advertisement on Instagram will mean more competition for eyeballs, however, and engagement has to fall from today’s levels, taking some of the air from Instagram fans’ balloons.
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