What started five years ago with a photo of founder Kevin Systrom’s pet dog has turned into one of the biggest social media success stories with 400 million users globally and the makings of a multi-billion dollar ad business.
Its success has come down to a focus on community, creativity and mobile consumption. But to ensure its future for another five years, Instagram must continue to evolve its creative formats and allow brands to better understand how consumers are using the platform.
Instagram’s advertising potential
An eMarketer report released earlier this year forecast that Instagram’s mobile ad revenue would more than quadruple over the next two years to reach $2.81bn in 2017.
Part of that growth is down to Instagram’s decision to open its ad platform to all but it is also due to the unique relationship it has with brands.
Its broad audience is attractive to advertisers – around 70% are under 35 and more than 60% log in daily. Plus a survey by GlobalWebIndex found that 53% of people use the site follow brands and 44% to research products.
Steve Hatch, Facebook’s UK MD, believes the key to Instagram’s marketing success has been the focus on its community and its “considered approach” to rolling out advertising. It has also, he says, benefitted from the shift to mobile and the expertise of its parent company, Facebook, which bought the firm for $1bn in 2012.
“First and foremost you have a platform which has substantial reach, that is creatively rich and now with the integration of Instagram into Facebook targeting we are able to make it easier than ever for marketers to make the most of advertising on Instagram.”
Unlike Facebook, Instagram doesn’t currently have an algorithm so brands know their content will be seen by a higher percentage of their audience. This, says, Toby Chishick, social media director at J. Walter Thompson, is a big bonus and ensures marketing on the channel is effective.
“Instagram allows people to easily make and share ‘artistic’ photographs and view and engage with those from friends, family and brands making it a viable and regularly effective channel for brands,” he says.
“There’s no filtering algorithms keeping the platform relatively pure meaning content gets seen by a higher percentage of the audience than on Facebook and engagement is easier with the ‘like’ action simplified to a double finger tap on the image.”
Initial studies suggest Instagram is having an impact on brand metrics. Research by Nielsen found that out of 400 campaigns, 97% had statistically significant positive uplift in brand awareness. Instagram is also 2.8 times more powerful than the online ad average at driving brand metrics.
Tim Pritchard, head of social media at Manning Gottlieb OMD, believes its success lies in how it enables brands to connect with people’s passion points around food, fashion and lifestyle.
“Brands are able to participate in conversations and bring another side to their personality. This is not just advertising it goes deeper and the aspirational nature really suits brands wanting to show off their best side,” he says.
Tom Malleschitz, marketing director at Three, believes Instagram has also done a good job of explaining its proposition and differentiating from other social networks such as Twitter.
One of the key barriers to social media has been ROI and a lack of understanding over how performance metrics compare to those in other media. Hatch says Instagram has done a lot of work on creating comparable measurements.
“Effectiveness is at the heart of the proposition and we are extremely confident about the potential Instagram represents,” he says.
How Instagram must evolve
There are challenges for Instagram. It is hoping to make the transition from purely a brand to a direct response platform but most brands still see it as the former and it has work to do to convince them otherwise.
Key to that is data, an area where Instagram lags. Currently the Instagram API does not surface much behaviour data beyond the trending hashtags, giving brands little insight into the ways people use the platform.
“We’d like more information on how people are using [Instagram] and how brands can then get involved,” says Pritchard. “We want to work more closely with Instagram to find out details on optimum frequency and how brand metrics can move as part of that.”
Some brands are also yet to be won over. While the case for travel operators and fashion brands that naturally have very visual marketing is clear, others are struggling to find their place.
Malleschitz says Instagram is not a priority for Three for this reason. “If you are a fashion brand it is absolutely clear that you should start with Instagram. We are selling connectivity, a philosophy and a why, so yes I can post nice holiday pictures, which we did and increased followers, but it works on Twitter and Facebook much better.
“It’s just about us finding an authentic reason to have a huge presence there.”
Advice for brands
Amy Cole, business operations at Instagram, has some advice for brands unsure how Instagram fits into their marketing mix. Key, she says, is to understand the platform, how it is different and how to fit in.
“The focus should be on who the brand is and what they stand for. A lot of the time brands will take the message they are putting on other platforms and stick it on Instagram without thinking about the audience or what it is they are actually trying to say.”
Amy Cole, business operations, Instagram
“It comes back to what are the business objectives, why are they using Instagram or running a campaign? And how do they create content that tells that story and drives meaningful impact with the people that they are reaching. Putting in that quality time and investing in what that message is and building the right creative and right story on Instagram,” she explains.
For Hatch the biggest mistake a brand can make is “not starting”.
“It’s easy not to but actually we have a platform that brands can experiment on. Those that are there are the ones that have learnt what works.”
- Interested in Instagram? There will be an social marketing stream at this year’s Festival of Marketing, which takes place on 11 and 12 November. For further details including how to book visit www.festivalofmarketing.com