By: Alice Lam
Although Facebook bought Instagram for $1 billion in 2012, the app has hit critical mass and now it is time to monetize. Facebook ads can easily track if the customer clicks on the link and buys the product. Even if I am on Facebook mobile, if there is an ad that I am interested in, I can simply click on the ad that will connect me to the website. The link also shows the the website that they acquired the customer through Facebook and thus, the reference is there and the ROI is quantifiable. It is a whole lot trickier for Instagram. However, last year Instagram have been trying out ads. Unlike Facebook, where the clicks through rate is easily trackable, the ads does not seem to be as intuitive on the Instagram app. Now, Instagram are using tech surveys to ask the user if the ad actually did/did not work. Although the questions are disguised as a kind of feedback to make Instagram be better, the app is actually collecting data to pitch to advertisers that their ads do work. Instagram now have celebrities on the app that have thousands of followers. Some of actors, and some are pets! Marketers are approaching these influencers to get them to position their products so their brand can be more visible. This seems to be a more organic way of marketing and costs them very few advertising spend relative to other channels of media. Though Instagram are not able to monetize the influencers, using a influencer seems to be a more nuanced and creative way to reach the younger consumers who are too smart to be duped into clicking on ads. It will be interesting to see if Instagram's advertising will be as robust as Facebook's. Though Facebook's mobile app has grown, many people still use the website version of Facebook and thus really have two channels of revenue whereas Instagram is mostly used through the mobile channel. Instagram is definitely growing but what it can do is quite limited.
Source: http://adage.com/article/digital/instagram-pop-ups-feel-advertisers/294344/
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