Your Instagram feed is about to change: paid advertising on the way

My morning routine pretty much starts exactly the same way every day. Open my eyes, turn off my alarm and then spend the next few minutes browsing through my friend’s photos on Instagram. But my routine this morning was a little different. As I scrolled down the stream of new content, a video that happened to be automatically playing caught my eye. This video wasn’t from one of my friends, but from the drinks company J2O!

My initial reaction told its own story, “What’s this doing in my newsfeed?” I mumbled to myself with my eyes half open, wondering if I was still dreaming. Now don’t get me wrong, I’m not anti-advertising. Well-positioned and targeted advertisements can be a fantastic way to grab your potential customer segments attention. But why was J2O advertising in “my” newsfeed? I don’t even drink orange juice!

Source: Robert Brunning

In 2012 Facebook brought Instagram for $1 billion dollars and had kept the platform relatively free of advertising. But last week the company announced new plans to open up Instagram to advertisers to target its 300 million users. Tests have also begun on adverts that will allow users to purchase online items including downloading paid-for-apps and content.

While the service is currently only for large brands such as Levi, Burberry and Lexus, it will soon be available for anyone who wishes to advertise. In the official Instagram blog, the team wrote, "Advertisers also want to target their messages in more effective ways and reach people not just because of their age, location and gender, but because of the people, places and things they love."

Source: http://www.thedrum.com/

With Facebook cashing in on Instagram’s popularity, one can only begin to imagine how much profit the company will make with its change to paid advertising. However, they must be careful not to oversaturate the users' feeds with advertisements, or risk disrupting their satisfaction. They must tread lightly and take a cautious approach to the adverts that allow. The appeal of Instagram is viewing visually beautiful imagery, so the prospect of “ugly” ads could greatly dissatisfy the end user.

My feelings on advertising through Instagram are mixed. From a personal perspective it feels like an invasion of a “sacred” place that should be left alone. However, from a business perspective I think it could be incredibly successful given the large amount of data users are willingly sharing with Facebook. Mobile platforms offer the potential for incredibly lucrative advertising space. That being said, these advertisements need a high level of targeting if they are going to be effective.

So, my morning routine will continue as usual for now, but I still won’t be drink orange juice!

Robert Brunning
Current student in the Master of Marketing program at the University of Sydney Business School