Instagram has been experimenting on showing ads in its network, including experiments on 'slideshow ads' that was a major change on how the photo-sharing app shows ads. On September 9th, 2015, it's ready to make bigger money by showing better advertising to its users.
During the launch, Instagram is making three big changes to attract advertisers marketing dollars around the world and from other ad medium. Initially available in more than 30 countries, including Italy, Spain, Mexico, India and South Korean, businesses of all sizes that have been testing ads came up with positive results.
The first change is that about 300 million people that use Instagram will see ads coming from businesses of any size, not just from big popular brands.
The second is Instagram now courting television and online advertisers with more standardized formats and buying options. Advertisers can now run 30-second video ads rather than just the 15-second video ads the company introduced in 2014. The dimension of the ads is landscape instead of squares. This means businesses can easily port their television commercials into Instagram ads, and they can also engage in richer storytelling.
The third is that Instagram is luring advertisers coming from different businesses sizes with a wide array of industries to use its ads with improved call-to-action. These include travel, entertainment, e-commerce, and retail.
After testing "Shop Now", "Install Now", "Sign Up", and "Learn More" options, these direct response formats that can link outside of Instagram will open to all advertisers.
All these formats and placements are available through Facebook's self-serve ad interface, Ads API, and Power Editor.
Facebook-Instagram: A Win-Win Solution
As a company owned by Facebook, its about time for Instagram to make the money the social giant spent in acquiring it.
This moment is what Facebook imagined when it first acquired Instagram. The company's strategy that has proven well for Facebook (aim for number of users and engagement first, then money), is implemented to Instagram.
Despite being a brand on its own, Instagram uses Facebook's ads technology and connections with big brands to get massive audience. Facebook has been supporting its back for quite some time, and it's time for the social giant to get the fruit of its acquisition. It took Instagram more than three years, but that moment has finally arrived.
Instagram stated that it would take years for it to stack advertising if it went on its own. With Facebook that has over a billion users, the reality comes to scale.
Advertisers can reach Facebook's pool of audience easily. They can buy Facebook ads and push them to people to both Facebook and Instagram. This would give Facebook a much efficient cost in running ads since each extra dollar earned costs Facebook less.
Moving People With Visual Inspirations
People use Instagram to "capture and share the world's moments." As simple as it can be, it's a free way to keep up with people using visuals as inspirations. With this advantage, Instagram is confident that its ads can give people the power to move people.
The announcement of the self-serving ad feature comes as Facebook is facing an increasing pressure from investors about how the company can make money from its big acquisitions, especially from its $2 billion acquisition for Oculus VR and $19 billion acquisition for WhatsApp.
By showing ads, Instagram is seen to have a huge potential because unlike most other mobile advertising platforms, it can target ads to a very specific details using technology and data from Facebook. This ability has proven well for Facebook, and good targeting ads in Instagram means that advertisers have the potential to pay more for ads it's showing.
From its experiments, Instagram concluded that despite having people rejecting ads in their feeds, users are still loyal to the service. As showing ads can bother people and disrupt user experience, Instagram is not going to show so many ads that can annoy users. Too much ads will make them lost within its contents. As Facebook succeeded in making ads appear more targeted by each of its updates, Instagram will benefits the same.