On the Future of Instagram Ads

photoCan I just say for the record, I love Instagram!  As a longtime amateur photographer (yes, I spent many hours developing & printing in a darkroom way back when) I am quite happy taking an “insta-break” to soak in well composed shots and blow by the rest.  Add in the fact that I believe you can’t just talk the talk in our business–to be a good social advisor, it helps to walk the walk or perhaps in this case, seize the #selfie. So it was with mixed feelings that I responded to Saya Weissman of Digiday’s questions about the pending arrival of ads on Instagram.  Undoubtedly, ads will change the Instagram experience and it is hard to imagine it will be for the better.

Now without going out on a limb here I suspect Facebook didn’t pay $1 billion for Instagram without a monetization plan.  No such thing as a free lunch or a free app. So ads on Instagram? You bet.  Non-intrusive ones that actually enhance the experience?  We’ll see.  And since predicting what Facebook will do is a fool’s errand, I jumped right in, offering my best prognostications (see below). Fortunately, Saya’s article also includes quotes from GE’s Katrina Craigwell (see my 2012 interview with Katrina here) and Matt Britton of MRY (one of NYC’s best places to work), two people that I know and respect.  Bottom line–I suspect you’ll want to read their opinions as well (after you get through mine of course!)

Saya: What do you think is the best ad solution for Instagram?
Drew: The beauty of Instagram is its  elegantly simple user experience.  The best ad solution will be the one that is the least disruptive.  For example, allowing sponsored posts to show up in feeds will not be too disruptive as long as there aren’t too many of them.  A highly disruptive experience would be adding pre-roll to video posts.

Saya: What is going to be the biggest challenge in implementing ads on Instagram?
Drew: From a marketer’s perspective, Instagram is going to have to make a lot of changes to be competitive with Facebook.  For example, right now you can’t include hyperlinks in the copy that goes with Instagram photo/video posts. Without a means of driving clicks somewhere, Instagram will only be able to sell impressions and cheap ones at that.  Another challenge is that Instagram doesn’t know nearly as much about its users as Facebook other than geolocation and the hashtags they use.  While hashtags may represent a currency that can be sold to marketers, it remains to be seen if these will have as much value as more direct search terms.  Perhaps the biggest challenge is that marketers are already on Instagram.  Those that are doing it right are getting thousands of fans to see their posts without paying a dime.

Saya: How do you think users will react to ads on Instagram after having it ad free?
Drew: It depends how disruptive the ads become to the overall experience.  Most will live with the occasional “promoted post” because the app is free. However, if the ads are too disruptive, Instagram can count on a user rebellion like the one they had over their privacy SNAFU.

Saya: Do you think it will be difficult for Instagram to woo advertisers?
Drew:  Certain advertisers will consider Instagram given its highly engaged user base.  That said, Instagram will need to prove that it can offer highly targeted exposure AND drive traffic either within the app to a brand page or outside of the app to external sites.

Saya: Will ads ruin Instagram?
Drew: Ads could ruin Instagram if they go too far too fast thereby disrupting their currently elegant user experience.  They will be wise to pilot various approaches with users who will give them honest feedback.   Also they might want to offer an alternative paid app subscription that is ad free for the purists.

One possibility is that ads will actually ruin Instagram for marketers who are already successful on the platform.  It is conceivable that Instagram would suddenly throttle brand feeds to increase the value of its impressions.  So for example, Oreo’s Instagram posts currently reach all 97,000 of its followers. Instagram could decide to throttle this feed to say 16% and make Oreo pay to reach the other 84% of its organically earned fan base.  I suspect this would not inspire smiles or happy cookie images from the marketing team at Mondelez.

Saya: What can Instagram learn from Facebook’s ad model?
Drew: Facebook is extremely marketer friendly when it comes to buying media on their network.  First, provide an easy to use self-service buying platform. Second, make it extremely easy to monitor and evaluate ad performance based on both CPM and CPC.  This is why Instagram will need to figure out how to include hyperlinks either in post copy or on the post itself.  Third, don’t oversaturate a user’s feed with sponsored posts. Fourth, allow marketers to sponsor posts to existing customers (like Custom Audiences) and “look alike” customers.  Fifth, have very clear and strict ad guidelines that limit that amount text on any image or video post. Sixth, make sure ads are identified as ads.

As always, if you have some thoughts to share, please do either here or on Instagram itself.  

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