Friday, 10 October 2014

Instagram Advertising About to Hit Aussie Shores

Advertising on social media platforms has been a highly contested topic of conversation for some time now, and one that continues to gain momentum as the business model of these companies evolves.

Going through my Instagram feed earlier this week, I came across a post from Instagram’s Instagram account (a mouthful, I know) explaining the upcoming changes to the social media platform’s operations in Australia. Namely, the post discussed the introduction of sponsored brand content for Australian users, a concept that has already been live in the US for a period of about 10 months (as seen in the images below).

Sponsored Branded Content in the US Market (Source:

In reviewing the press surrounding this announcement, it’s very clear that Instagram’s strategy seems to be heavily focused on curating ‘on brand’ sponsorship content. As mentioned by Instagram Australia’s spokesperson, Antonia Christie, ‘Instagram is about imagery over identity and creativity and craft win on Instagram. The best advertisers on Instagram will have a strong sense of the platform and how to interact with the community.’

So although it will be interesting to see with whom Instagram has partnered with in Australia, it’s reassuring to know that they are being selective with both the brands they intend to work with, and the resulting images that are being approved as sponsored content.

But despite these efforts, it is inevitable that the presence of sponsored content will appear as being disruptive for some users, especially since the whole concept of Instagram relies on the choice in the people you follow, and the content that appears in your feed. In response to these concerns, transparency seems to be key to Instragram’s approach to advertising, as each individual ad will be clearly flagged as ‘sponsored’, and also comes with an option to be later hidden by users from their feed if they are not interested in the ad’s content.

From a purely business perspective it makes sense for Instagram to develop new revenue streams, given that there  are concerns with the sustainability of providing a free service, especially one being used by almost 200 million people across the globe. So having been bought out by Facebook in 2012, it comes as no surprise that advertising has been selected as the primary revenue model for Instagram, especially given how successful this model has been for Facebook itself in recent years.

I’ll have to issue a ‘watch this space’ for now as we wait for the ads to eventually roll out, but so far it seems that Instagram has a well thought out strategy, and one they intend to implement in Australia with as little disruption to the user experience as possible.

Salil Kumar
Current student in the Master of Marketing program at the University of Sydney Business School

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