With a growth of 50 million users in the past six months, Instagram is the social network that has been causing a revolution on the online social scenario lately.
Few factors can explain it: the visual social network had a sudden growth in the past six months with 50 new million users, and now reaches a total of 150 million users; the recent confirmation that paid ads will be part of the social network and are supposed to be launched initially in the US and then in the rest of the world in the next few months; but mainly the video functionality, launched to compete with Vine, the Twitter app that was a huge success and has been kind of left aside since Instagram adapted a longer and improved version of video (most notably 15-second, filter-enabled, editable video function if compared to Vine’s 6.5 seconds) to its platform. Also, we need to remember the very important fact that the app was finally released to Android users, since Instagram was exclusive to iPhone when launched. And that opened its doors to the whole world, considering that now over 60% of users are out of the US.
What is really surprising though is the fact that the picture/video app increased the number of private and governmental companies creating and activating accounts on it: even NASA launched about a month ago its official account, with thousand of followers immediately after the official pronouncement that the account would be open to the public. A report conducted by the NYU Luxury Lab stated that 36% of luxury big brands were active on Vine since its launch, on January 2013. But since the launch of Instagram, 25% of the big luxury brands known worldwide started to experiment the app and created accounts or posted videos on their old accounts. And 25% is a number that should not be ignored.
Considering the pessimistic prediction that evolved the app when Facebook bought it early last year, what can be seen now is not only a successful marketing case, but a great branding effort with tendencies to grow stronger and further as the video app is improving and the ads are about to be launched with all the buzz and the expectations they deserve. These ads are already there, though not on Instagram itself. And in such a subtle way one can barely tell. For example: American Licorice Co., maker of Red Vines, quickly turned Instagram videos into ads that ran on Facebook and Twitter. And I believe that was the idea of many of these big brands when they started to try or use their Instagram accounts to post videos. Another great example is Gap – the brand posted a video in the very same day of the release of the video functionality, a sort of corporate short movie adapted from one of the ads of the company.
After all, we are talking about free 15 seconds of advertising available to 150 million users worldwide. Companies like Nike Inc. and Lululemon Athletica Inc. have already found ways to run viral marketing campaigns on Instagram without paying anything. So obviously the next step would be to monetize it somehow. And that’s what happened.
The idea regarding the paid ads is to offer something that runs on Instagram, most likely similar to Facebook’s newsfeed ads that are more or less native to the existing activities users are engaging in. After all, when 150 million people are hanging out in a place where they’re viewing a lot of beautiful, funny, evocative images and videos, you can be sure that, when given the opportunity, advertisers will follow them. Whether those people want to be followed or not.
The big controversy about ads on Instagram marks the second big change on the app in less than four months. The first, the video itself, brought sound and motion to what had previously been a quiet, mostly serene user experience. With video live, Instagram can now attempt to capture the higher CPMs video ads command on the web.
The ad concept will be a big change to Instagram users and modify completely the user experience for people that were used to a platform that offered a “native” way of browsing: from now on, brands that the user do not follow will appear on the timeline. At the first moment, the ads will show only to users in the US, sparing the 60% of the users abroad. And Facebook, Instagram’s owner, claims to have a very careful plan to launch these ads. On the official blog post where they released the plan, they say: "We'll focus on delivering a small number of beautiful, high-quality photos and videos from a handful of brands that are already great members of the Instagram community.”
From the content point of view, it can be really interesting. As the blog post says, users will have the choice to hide the ads that are not interesting, just like Facebook allows. Also, the video feature allows brands to generate content specifically geared for Instagram.
So we understand that the experience will be a choice, and not an imposition. The video feature, in the end, came as a kind of backdoor for brands to serve video ads on Facebook. Considering all the cheerful and unique visual appearance of Instagram, what can be expected is at least an exclusive way of making advertisement.