Instagram Ads are here: All you need to know

Think what you want, but no one doubted this would come. Instagram ads are being rolled out globally these days, and thereby extending the 18-month beta-version of the product they have been running in US and UK.

Whether you’re a business looking to expand your reach and sales or a consumer hating the idea of another social platform introducing ads, this is major news for you. We know this will change the rules of marketing just like Google and Facebook have done it in the past, and we know it will have an effect on the 300 million people using Instagram worldwide. Some will dislike it, whereas others will be happy that there will finally be some more transparency on the social media, as previously companies have paid the owners of big Instagram accounts to broadcast their images. Not only is this in the grey zone as it lacks transparency, it also does not allow for very smart targeting. Therefore, opinions are split between those who simply do not want to see ads and those that appreciate the increased visibility of when a post is sponsored.

An example of our ad and an Instagram ad

As a business, we see three major things you need to do to win the Instagram ad game:

1) Be early adapter and start now – before your competitors

2) Be authentic, and deliver high quality that does not annoy people’s experience on Instagram

3) Utilize the extreme targeting options: A restaurant owner can now target one picture of a steak to meat-lovers and picture of a salad to vegetarians – all in a 500m radius

The most important reason for businesses to start utilizing the ad function of Instagram is that people keep full focus while going through their feed. Unlike TV-commercials or billboards which are ignored completely in 2015, being able to deliver relevant content to people in a native way on their favorite platform is a recipe for success, just like we have seen with Facebook sponsored posts.

As a general comment, we’ve previously seen that Danish companies are slow to adapt to changes like this. Therefore we believe we’ll see more international companies being able to compete smarter and better on the Danish market, thereby taking a significant amount of our sales and exports.

Early reports expect Instagram ads revenue to reach $2.81 Billion by 2017. We clearly expect that number to be significantly higher for two simple reasons:

1) The assumptions are made on a expected growth rate of 0. We expect Instagram to keep growing despite the introduction of ads – just like we saw with Google and Facebook in the past.

2) With the learnings of the above mentioned companies, we expect Instagram to be able to monetize faster than similar companies in the past. This will mean average CPC (cost per click) will increase at a faster pace than expected, and more businesses than expected will pick it up.

As for the details of the rollout, few things are clear:

  • You will be able to send traffic to your website or to download your mobile app
  • Your setup will be from your Facebook Power Editor where you can also choose your audience
  • The rollout is happening slowly and thus not all will have access to this service at the same time

At CupoNation, we’re already experimenting with this service in the countries where we can. Early learnings for us show that it is a very effective way to reach new audiences, and that we are not seeing any negative part from the customers at all. Quite the contrary, it seems that sharing good quality images (even when sponsored) are the new core of Instagram, and exactly the reason people use the platform so much.