The Monetization of Instagram

source: onlinemarketingrockstars

The recent product updates of Instagram and the announcement that the platform has reached 400 million monthly users made me think about some fundamental questions.


The Instagram ad platform is now open for everyone - what are implications for influencers and marketeers? 
There are a lot of brands and influencers that are already monetizing their reach on the platform. Even though you cannot include links into your posts, paid product placement or lead generation through the link in Instagram profiles are generating millions of dollars for influential individuals and brand on the platform. On the one hand, Instagram relies on these profiles for the high quality content they are providing and for engaging with a massive young audience. On the other hand, it is very likely that Facebook in the future wants to participate in the business being conducted on their network. There are no signs of Facebook going to war with influencers but it will be really interesting in the long run, what features or policies they are going to launch in order to monetize on the lucrative category of influencer marketing.


Everyone is talking about influencer marketing - is there something missing for a breakthrough?
Marketing and tech media are talking a lot about influencer marketing, still it seems like a very early category compared to what's the the potential of it. My impression is that many companies are still figuring out how to benefit from it and how to integrate influencers into their campaigns. Many are still struggling with building meaningful relationships to influencers, addressing influencers that fit their brand and target group, and telling authentic stories with them. The landscape seems confusing and companies like Neoreach are still working on making it easier to get access to the right channels here. Once these tools and channels are more established, I expect influencer marketing to grow tremendously and to move on into other categories besides lifestyle and fashion

Will there be a new ecosystem of agencies and affiliates or is Facebook cutting them all out? 
This question is still very open to me and I am excited about discussing it people who work in marketing. Affiliates like Megachat hugely benefit from their reach on Instagram and they reach more than 1.8 million followers with all their accounts. They build up own accounts and work with other influencers to maximize the value of their affiliate services. At the same time Facebook launched its own Instagram partner program that starts with 40 agencies which are supposed to help bringing brands on the platform. The experience from the Facebook ad platform but also from the early days of Google has shown that they might offer short term incentives for agencies in order to kick off their ad services. In the long run, media blogs expect only a marginal share of less than 2% for intermediaries like ad agencies. Once the platform has matured to a major player, Facebook is likely to cut out many other players and exclude them from the revenues made on the platform.