“… Since introducing ads last November, we’ve worked with a handful of top brands to draw creative inspiration from the community and create ads that were engaging and felt natural in people’s feeds,” read a post on the Instagram For Business blog. “…So far, our community-focused efforts are working. The results for advertisers have been positive — and in some cases, well above the ad industry’s average for performance. We’re excited to build on this momentum, and in the coming months we will extend the same level of care and consideration as we introduce ads on Instagram to our global community.”
The post indicated that future global expansion of the Instagram ad program is possible.
“Instagram’s efforts to boost their ad offerings comes at a time of increasing competition from social media companies like Twitter and Pinterest that share a vision for how native advertising can improve the state of mobile app monetization for marketers, app developers and users,” said Dr. Panos Constantinides (pictured), Associate Professor of Information Systems, Warwick Business School. “What makes Instagram’s native style ads valuable is the fact that they flow through a news stream where users see photos one at a time as they scroll through, thus, allowing for more exposure. At the same time, this approach is also disrupting the user experience as some US users have reported. That is why Instagram has set the bar high for creative ads, pushing prospective advertisers to produce high quality, almost print-worthy images that fit the aesthetic of the mobile service.
“Instagram ads will target people who don’t follow a specific brand that wants to advertise on the mobile service,” Constantinides continued. “These ads will be differentiated with the word ‘sponsored’ at the top of the image. Users will be able to hide them by tapping a symbol at the bottom of the photo, which will help filter ads in the future. Innovative as it may seem, though, some have questioned the pricing model Instagram is offering to advertisers that reportedly could put a month-long buy into six figures depending on the reach and frequency sought. The pricing model could push advertisers to start narrowing their target audience and thus minimizing their reach. More critically, by getting the target audience wrong advertisers and Instagram may risk intruding into the privacy of those people that don’t want to be reached, possibly risking actual use of the mobile service. So, a question remains, how innovative can Instagram be with their native style ads and should they involve users in the innovation process?”