Instagram

Instagram Plans To Roll Out Expanded Advertising Platform

Instagram, the Facebook-owned photo sharing social network, announced today they’d incrementally make their advertising platform available to global businesses of all sizes. Although 18 months old, Instagram advertising solutions have been slow to hit their full potential – largely because Facebook’s social reach and ad costs are reasonable enough for everyone. But according to a blog announcement by Instagram, preliminary advertising tests spanning one year and 475 campaigns showed an incredible jump in ad recall, nearly three times the Nielsen ratings norm.

Pinterest, which offers promoted pins, concurrently announced their intentions to roll out better ad targeting, meaning the pictorial advertising space just doubled its competitiveness. Executives at Instagram are counting on the millions of passionate picture posters to help drive advertising interest through the ceiling, yet with more people posting pictures to Facebook and Twitter, it will be hard to gauge Instagram’s advertising effectiveness until Instagram rolls out planned call to action features and makes them fully functional. We saw Groupon and social media work well together, have witnessed the power of monetizing YouTube then sharing in Facebook, so perhaps Instagram leveraging Facebook’s infrastructure will provide substantial returns for the advertisers using their platform.

Much like Ad Choices, Instagram users will have control over what advertising gets placed in areas they frequent. While Instagram’s ad platform will be opened to everyone, the call to action buttons will be beta tested before being implemented site wide. Although numerous sources cite the commercialization of Instagram may slow usage, one Wall Street company predicted Instagram could provide Facebook up to $2.1 billion extra this year, according to New York Times coverage. A 2014 Cowen and Company report shows that Instagram users average 21 minutes engaging with other users and other pictures via the Instagram app, which is roughly half of what society spends on Facebook but slightly longer than the 20.8 minutes spent on Pinterest. These metrics could play an incredible role in how much advertisers chose to spend on targeted ads, and how well app users respond to them.

Instagram is heavily preferred by the 18-29 year demographic whereas Facebook targets the college to middle age woman, which translates into trending items like clothing, tech and mobile accessories faring well with younger shoppers. All told, with Facebook raking in over $3.5 billion in Q1, it’s about time executives monetize the company which cost Zuckerberg and Co. $1 billion in cash and stock in 2012.

Facebook (FB) shares closed Monday trading at $80.29 on NASDAQ and were in the green during Tuesday afternoon trading.

[Photo by Justin Sullivan /Getty Images News]

Comments