The Monetization of Instagram

Instagram-logoInstagram has come a long way since its launch in 2010. Now the go-to photo sharing network has over 300 million active uses who post 75 million photos per day. In October 2013, Instagram started to incorporate advertisements in user’s photo feeds, launching more than 475 campaigns, as measured by Nielsen Brand Effect, to the user base. In 2015, Instagram is changing its ad format once again with the introduction of  “Shop Now”, “Install Now”, and “Sign Up” buttons at the bottom of each posted ad.

These ads will use demographic targeting and an API to manage campaigns efficiently.  One stand out advantage to Instagram’s ads are that they don’t leave the Instagram app. Upon clicking the action button, a mini browser opens within the app where users can ‘shop’, ‘install’, or ‘sign up’  all without leaving the Instagram app. Once you complete the desired action, you return to the spot you left off in your Instagram feed.

These advertising options are not only available for big business, small local businesses will be able to purchase advertising similar to the way it’s done on Facebook. This leaves great possibilities and chances to engage with users to create customers. Advertisements aren’t only getting action from the added buttons, but are also able to generate attention with the “like” button comment section and hashtags. Generating views through normal Instagram activity.

This is a big step for Instagram as it now becomes a bridge to directly connect B2C. This simple but potentially highly effective marketing technique is a creative (and hopefully non-invasive ) way businesses can connect to users on a smaller scale, without large advertising firms.

The new Instagram advertisements are going to be rolled out slowly, beginning with a beta test in Spain.Will this hurt Instagram’s reputation? Will Instagram lose its top rating of favorite among users? It’s hard to say. While it will undoubtedly take some time for Instagramers to get used to seeing additional ads, our addition to the photo-sharing service will most likely overrule our aggravation.

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