Since it started rolling out sponsored ads over a year-and-a-half ago, Instagram — whether users like it or not — has fast emerged as brands’ new darling advertising platform.
Brands have been quick to embrace the photo sharing platform’s custom targeting and call-to-action buttons, such as “Shop Now” and “Learn More,” especially since its API was opened to all brands over a month ago.
Taco Bell, Mercedes-Benz and Chobani were some of the earliest adopters to have experimented with sponsored posts on Instagram as its foremost brand partners. While Taco Bell used Instagram to announce its new breakfast menu in April and saw a 29 point lift in its ad recall, Mercedes-Benz used Instagram to launch its compact SUV called the “GLA” in conjunction with Facebook last fall and saw a 580 percent increase in visits to its site.
Chobani, on the other hand, relied on Instagram to elicit a significant change in its brand perception, using the platform for a series of sponsored photos to showcase how its products were not only limited to breakfast.
“Paid posts make it even more imperative to have good content, because it doesn’t suffer fools,” said Peter McGuinness, CMO at Chobani. “In a world of pay-to-play, it pays to be creative.”
According to Instagram, ad recall from sponsored posts on the platform was 2.8 times higher than Nielsen’s norms for online advertising across nearly 500 campaigns measured globally with Nielsen Brand Effect in June. Recent data by social analytics firm Shareablee also concluded that Instagram prompted three times more customer actions than Facebook and Twitter.
Then Instagram opened the floodgates. After it opened its API in August, brands from every category have placed their bets on the platform. Today you can find ads for everyone: from jewelry-maker Verragio to French fast fashion brand Rad.co and from wine subscription service Club W to dating app Happn.
“It’s a great platform that has a lot of things in common with us: their community is very connected, urban and on the lookout for newest trends and a qualitative experience,” said Marie Cosnard, head of media relations at geolocation-based dating app Happn.
Happn has been advertising on Instagram for a month now, and has reached more than 3 million users in Paris, London, New York, Los Angeles, San Francisco and Sao Paulo. It has also seen a conversion rate of 84 percent in terms of app downloads and registered users. Happn now plans to extend into newer cities.
Rad.co has had a similar experience.
“We saw Instagram as a way to maximize engagement in a pure native style; that’s what we achieved,” said Jérémie Encaoua, head of digital marketing at Rad.co. “Adding additional layers of bidding and targeting, like optimizing CPMs for a given conversion like subscription or purchase would help further.”
A recent study by eMarketer predicted Instagram’s global mobile ad revenues to reach $2.8 billion by 2017. This year alone, Instagram is expected to rack up $595 million in mobile ad revenue globally.This rapid growth can be attributed to high demand for Instagram’s new ad products, including a full slate of Facebook’s targeting tools. So expect to find even more brands on the platform.
“If executed properly, ads on Instagram allow us to align our brands with powerful imagery in a natural and non-invasive way,” said David Spencer, director of digital media at Campbell Ewald. “It will be fascinating to see how advertisers engage the Instagram audience over the next six months.”