Instagram is all set to monetize its service. After many experiments, on Tuesday, the company stated its taking measures to make its ads available to all types of businesses and not just selected few.
Facebook that bought Instagram in 2012, has kept the photo-sharing service mostly ad-free zone, permitting only very few big brands to insert carefully created commercial ads on the service. Now, it opens the site for the hungry marketers who are waiting to make use of the Instagram’s advertisement platform. Marketers will be able to target ads to the 300 million users of the service on the basis of interst, age, gender and other factors, very much similar to Facebook. One can soon see ads from local tattoo parlor to global cosmetics brands on their feed.
The new ad formats targets to assist businesses drive customer conversion on the app itself. For instance, the ads will help the users to know more about a product or service and then ‘take action directly from an ad to sign up on a website or purchase a product or to download an app.’ The new formats are called action-oriented format and they have a button placed below every image.
“The quality of the ad experience remains a very important point of differentiation for us,” said Instagram’s global head of business and brand development James Quarles in an interview. This new strategic move to widen the ad platform is an important and significant one for the popular mobile photo app. Quarles said the work is under progress to make the ads more relevant and directing at the right target is the next stage of development.
However, by opening the service to all marketers Instagram may face the risk of losing control over the ad campaigns and let in potentially irking users. Measures are taken by the company to have a control over the quality of the advertisements. Regarding the ads, principal analyst at eMarketer Debra Aho Williamson said, “People are used to seeing beautiful brand imagery in their feeds. Now they will see more direct response ads and we all know the baggage that comes with that.” Instagram is working on to carefully balance between the desires of the advertisers and its user, without altering the user experience.
The users of the Instagram are not very happy to welcome the commercialization but it is quite inevitable. Majority of the social networking sites like Facebook, Twitter, Pinterest, MySpace are providing the service free for its users and they have no way but to turn to marketers to make money to pay their bills.
The marketers have long anticipated the opening of the platform for ads who see big money for Facebook and the brands shown in the ads to the Instagram users. The uses of these services are generally young, enthusiastic group who like, share and comment on the products which increase the product reach higher than any other services.
RBC Capital Markets, one of the Wall Street firm, has estimated a figure of $1.3 billion to $2.1 billion revenue to be generated that Instagram ads could bring to Facebook in one year alone, which depends on how early the platform is opened. Brands and retailers considers advertising in these platforms is an easy way to lead people to make a purchase of the products they like. It could be as easy as click the like button on the Instagram for a pair of shoes could take the user to the site where he or she could buy them. Right now, the experience is not all that simple especially on mobile phones, where one has to copy paste the link on a browser to search for it. “It is not fun as a user and hard to track as a brand,” said Kfir Gavrieli, CEO of Tieks, a company that makes foldable ballet flats.
Williamson said, “These updates on Instagram completely change the character and nature of Instagram advertising.” She also added, “New ways to target and an API are both things that advertisers have been asking for a long time.”