Instagram Advertisements: A Picture Perfect Business Strategy?

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ADOTAS — Instagram, the undisputed leader in the photo app space, had its third birthday on October 10th. Since its start in 2010, Instagram has accumulated more than 150 million users from around the world.  This massive audience opens Instagram on their phones or tablets on a daily basis to share and view high quality photographs from family, friends and celebrities. Just as Twitter has become the app for current news and trends, Instagram is the place to go to scroll through photos.

Like Facebook and Twitter before them, Instagram was a colossal tech company that lacked any real revenue stream. This lack of income left many financial professionals scratching their head when Facebook purchased the company for $700 million in stock last year. However, recent news from a blog post released by Instagram could have those same investors praising the purchase in the years to come. In the post, the photo app giant announced that they would start to slowly roll out advertisements on the feeds of their users.

If Instagram is able to implement their advertisements without disturbing the user experience to the point where people would rather spend their time on other apps, it could result in phenomenal yearly revenue. In fact, financial analysts like Arvind Bhatia, from Sterne Agee, believes that Instagram could make as much as $400 million during its first year with ads. A number that would surely rise in the years to come as common early kinks are worked out.

Now, the biggest question facing Instagram is whether or not they can keep their users happy. Public out roar in response to the news of advertisements on social media platforms is far from new. Facebook and Twitter both saw news headlines proclaiming their demise as an unruly public wouldn’t stand for advertisements on platforms they learned to love without them. However, sponsored posts and tweets have been implemented and numbers for both social media powerhouses are far from down.  More so than Facebook, Twitter did a phenomenal job of peppering in sponsored tweets without it becoming overbearing. If a person isn’t interested, they can continue to scroll and no real harm has been done – a concept Instagram is looking to emulate.

In the blog announcing the news of advertisements, it was clear that Instagram expected some apprehension from the public. They explained the process, stating, “Our aim is to make any advertisements you see feel as natural to Instagram as the photos and videos many of you already enjoy from your favorite brands.”

As long as Instagram doesn’t oversaturate user feeds with advertisements, it’s very unlikely that people will stop using an app they have grown to love. The fact that Instagram recently received rave reviews for their recent update that provides the capability of shooting and posting 15 second videos has only further solidified their space in the social media landscape.

From a marketing perspective, businesses should already be taking advantage of the many opportunities provided by Instagram. An active account allows a business or brand to connect with an audience that will continue to grow in importance in the years to come – mobile users.  The ability to connect in real time with people on the go is a great way to maintain brand relevancy. The new wrinkle of advertisements is just yet another facet that marketers should consider adding to their strategy. The audience online is growing, the power is in the hands of advertisers who are constantly evolving their marketing strategies to meet the needs of updates like Instagram advertisements.

 

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