Instagram Ad Rollout Will Make It the Top Media Buy: New Research

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.

A Mature Digital Marketing Industry Provides SEO Opportunity For Small & Ambitious Businesses

As we approach the end of the year, I thought it would be worth reviewing 2013 — and discussing what opportunities lie ahead — from the perspective of a UK-based SEO with a diverse range of multinational clients.

This past year has unarguably been an exciting year for search marketing. We’ve seen Google take dramatic action to clean up its search result pages with its well-publicized Penguin and Panda updates, both of which are still being tweaked in ongoing updates.

This has resulted in a “clearing away” of lower quality sites using unethical SEO techniques and, therefore, a reward of greater visibility for brands “doing the right thing” online — much to the delight of ethical SEO agencies that play by the rules and focus on building relevancy, quality and long-term value for their clients.

The impact of this clearing-out, which has been particularly evident in the retail space, is profound, with better general discoverability for legitimate retailers over pure-play affiliate sites with domains to burn for short-term gain.

So, for SEOs running brand protection against knock-off retailers, life got a lot easier in 2013.

The UK has always been well positioned for technical, high-quality SEO agency support, with a number of world-class agencies rising above the substandard “SEO” of public imagination (and I do think we have a reputation issue as an industry). But European and US agencies have also really pushed the envelope in 2013, upping their game and delivering more technical, stats-led strategies using agile tools to drill down to the quick win opportunities that drive bottom-line revenue improvements for their clients.

As a result, forward-thinking businesses are particularly well positioned to take advantage of a number of multinational opportunities today that are present thanks to Google’s relentless focus on search quality.

Tools To Deliver Multinational Without Breaking The Bank

Arguably, there’s never been a better time in history to be a small brand looking to take on the big guns.

Google now offers tools (such as the hreflang sitemap) which allow small retail websites to roll out to new territories with minimal technical challenge and none of the negative SEO impact typically caused by duplication issues. (If you’re interested in the detail, I recommend this roundup on duplication.)

Of course, this advantage is by no means restricted to small sites, but small = agile, which typically means a competitive edge in getting changes implemented onsite.

So, you can now test new markets online in a way that has never been possible without significant technical and PPC budget. In fact, I’d argue that given the ease with which multinational e-commerce processing can be added to sites these days, your only question should be, “Can I reliably fulfill delivery?” If you can, there’s no reason not to be visible in a given target country right now.

I talk further about the SEO opportunity in this technique and its power to deliver a level playing ground across all brands — regardless of size — in a recent eConsultancy post.

In effect, all brands can be multinational. Smaller brands are agile enough that they can steal a march on their larger competitors by utilizing Google’s tools for huge multinational opportunity.

Challenges In Retail: Paying For Freedom

Two recent changes present a challenge to retailers using online as a key channel.

The first is Google’s migration of its shopping search service to paid-only back in February (in the UK, earlier for the US); the second is its dramatic removal of inbound search term data in its Web analytics package. Both require paid search (PPC) whereas before, they were vital tools provided to retailers for free.

Let’s take a look at the first of these.

Where Once There Was Free Traffic…

…now there is only paid.

Google Shopping was once one of the most economical search channels available. In fact, before it became Google Shopping, it was known as Google Base and inclusion could dramatically ramp up traffic for included retailers due to slow adoption.

All that was required was provision of a detailed and well-tagged feed with all items stocked for inclusion. In return, shopping results were regularly placed above #1 rankings for the highest competition search terms, driving huge quantities of traffic for the largest retailers.

Today, PPC budget must be allocated against the feed to retain inclusion. While still effective, this makes Google Shopping a more problematic feed to supply, as there is no control currently (though watch this space!), over how that spend is allocated across the feed. The unwary retailer could easily end up paying over the odds for clicks to low-value items that generate little or no profit margin.

Dynamically adjusting the feed’s listed items is a bootstrapped way of implementing control over the daily budget held against the feed, but more sophisticated bid strategies are required to really regain the power of this channel.

Ideally, stocking provisions and dynamic price control should be the only dynamic feed elements, removing items that are out of stock and synchronizing product price offers through to the SERP. Allowing standard PPC control over the feed bid strategy would allow for regional bid control, multi-device targeting options, product-specific CPCs and ad creative control and testing.

This is a challenging area for retailers, as the technical specifications are rapidly changing and no clear statement has been made by Google relating to its intentions with bid options. Watch this space is the watchword here.

Tracking Success

There are clear options when considering the second challenge, however: Google’s removal of search term data from its referral strings.

The first, and most obvious option, is to use something other than Google Analytics — an analytics package that could potentially gather keyword data from a different source. However, there are incumbent issues there: if you’ve previously been relying on Google Analytics, then you’ll be losing comparative historical data.

Think that’s no big deal? Consider how different your retail volumes are in December when compared to January and you’ll hopefully appreciate how important it is to compare like-for-like when performing analysis.

There are some options to consider to replace the data Google is now removing:

• You can replace referrer search terms (and look at your SERP CTR) using Webmaster Tools data. However, this data is not a like-for-like replacement of the original referrer data and needs to be treated as such. For big retailers, it will only be a tiny drop in the ocean of their referrer terms.
• Use third-party tools to gather search term rankings (including those of your competitors). This can be difficult if your tool isn’t up to scratch, or if you’re monitoring a significant chunk of terms.
• Use analytics based on ISP data (though this is a very expensive option and so not practicable for smaller retail brands and also doesn’t solve the referrer string issue).
• Implement thorough (and expensive) PPC campaigns replicating all traffic driving terms to date to gain the equivalent data via paid search.

It is clear that the trend from both of Google’s changes indicates a determination to push search analysis and sophisticated traffic-capturing strategies further into its paid search offering. Businesses which have traditionally stayed clear of paid search would be well advised to revisit their decision and sharpen their paid search skills over the coming months.

Online Champions

The market boasts some fantastically successful online retailers, and the general industry trend shows that retailers are planning to further expand their online marketing efforts in 2014. This is particularly likely in the mobile and tablet space, where the overall level of marketing spend is at a lower density than the traffic opportunity due to the recent  massive traffic and retail growth across both device types.

Combined with that trend, the further shift in the retail market into multi-device purchase paths (search at work on a desktop, go into a store and use a mobile for comparison, share the product pictures on the family tablet, etc) suggests that along with multinational opportunities for traffic growth, responsive Web platforms supported by a multi-device, multi-region paid search campaign will flourish in the new year.

Opinions expressed in the article are those of the guest author and not necessarily Search Engine Land.