The Current State of Instagram: Will Advertising Ruin It?

Advertising has not been overly kind to the major social networks. Facebook ads have improved with the newsfeed capabilities, but there was a long period of suffering through ineffective sidebar ads. Twitter’s promoted tweets, accounts and trends can come across as intrusive, while the company continues to bleed money on the brink of its IPO, has never been profitable. And LinkedIn—well, LinkedIn has seen success financially, but it has differentiated itself by having diverse revenue streams. Welcome to the party, Instagram. Good thing you have those Facebook dollars backing you up.

Perhaps Instagram ads will not be as bad as many thought when the announcement was made. The company fetched $1 billion from Facebook without having a cent of revenue outside of VC funding. It is a superior product that was—and continues to be—popular among the masses. With this superiority, there is a hope that the ads will also better than those hosted on other networks. Sponsored content (native ads, branded content, etc.) has proven that the channel hosting the content ties closely to the editorial quality of the content. Compare the native ads of reputable outlets such as the Wall Street Journal and The Atlantic with BuzzFeed, and you see a quality threshold. That same threshold exists on Instagram, and allows the network to distance itself from the likes of Facebook, Twitter and LinkedIn.

I saw my first Instagram ad yesterday and almost didn’t notice. Unlike ads on other social networks, the Instagram ad—by GE, which is known for going heavy on the visuals in its marketing tactics—slips in unnoticed, except for the “sponsored” label stamped in the upper right corner. The way Instagram is designed leaves no room for clutter. No deviation from how we are used to seeing the stream of photos and brief videos posted by those we follow. As an Instagram user, I am happy about this because it doesn’t actually change the type of content I consume on the app. As a marketer, it means two things:
1) You’re limited in the different forms of content you can create
2) You need to step up the quality of your game if you want to stand out among the content that people actually want to see on the app

Nobody goes on Facebook, Twitter or Instagram for the ads, but it’s inevitabile. Death, taxes and advertising are the only guarantees in life. On Instagram, there is a stronger potential to showcase products in a much better light. Many brands already have accounts on Instagram providing some impressive imagery, and the sponsored ads are simply amplifying the audience.

Michael Kors was the first brand to run an ad on Instagram and is claiming it as being an enormous success. From the one ad seen here, the brand says that the account received 33,000 new followers and that the sponsored post had 370% more likes than average of the brand’s five previous posts. Certainly a good sign, but it should also be noted that of the 300 comments the ad received, two-thirds of them were negative, so it wasn’t all unicorns and rainbows.

I’ll end with calling attention to an excellent claim made in this Business Insider article about how Instagram messed up its advertising strategy:

“Instagram is about capturing beautiful moments, not shopping in a mall or catalogue. Brands shouldn’t bring stock photos to the platform; instead, Instagram’s most talented and influential users should be selling the rights to use their content for advertising.“

This is something that Facebook and Twitter have often forgotten within the past couple of years. The users are what cause these networks to grow and thrive. Create poor experiences, and you run the risk of losing your users. The sponsored ads on Instagram do not necessarily create a poor experience for the users, but by missing out on the opportunity brought to light by Business Insider, Instagram lost out on making the app better for its users. This is a fixable situation, and one that could end in a win-win-win for Instagram, advertisers and, most importantly, the users.