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Instagram Opens Ad API Partner Program – Continues Shift Towards Monetization

Instagram Opens Ad API Partner Program – Continues Shift Towards Monetization | Social Media TodayGet ready for more ads on Instagram.

Following on from their announcement back in June that they’d developed an advertising API, the Facebook-owned image sharing network has now opened up their ad platform to a range of “experienced Facebook Marketing Partners”, including Hootsuite, Kenshoo, Brand Networks, Salesforce Marketing Cloud, Unified, SocialCode, 4C, Nanigans, and Ampush. Through these providers, marketers will now be able to be able to buy Instagram ads and plan out their Instagram marketing activity in a more automated and strategic way – previously, the only way to purchase Instagram advertising was via an actual Instagram representative, and, for the most part, it’s been exceedingly expensive, limiting its use to big advertisers. Now, through these approved partners, all brands, big and small, will be able to start reaching out to Instagram users via ad content. But is that a good thing?

Growing Demand

Instagram is currently the fastest growing social media network in the world. In December last year, Instagram announced that it had reached 300 million monthly active users, which, at the time, put it ahead of Twitter, which has long been considered one of the top three social networks (as per last week’s Q2 numbers, Twitter has stumbled at 316 million monthly active users). With a rising amount of users migrating from other networks across to Instagram – notably Facebook – advertisers have grown increasingly keen to capitalize on this shift and have been eagerly awaiting the extension of Instagram’s ad offerings.

Instagram Opens Ad API Partner Program – Continues Shift Towards Monetization | Social Media Today

Instagram is growing at a faster rate than other networks (via Pew Research)

While the announcement of an advertising API doesn’t signify the start of an all-in, free-for-all ad blitz on the platform, it does signify the next stage the evolution of Instagram from its basic roots. Instagram, at core, is still a very simple network – you can’t post links or interact as openly as you can via other networks, and you can still only utilize the platform’s full functionality via the app. That simplicity cannot be taken for granted, as it’s undoubtedly a significant factor behind the network’s ongoing growth. To a degree, Instagram is the antidote to the rising clutter of advertising and blatant self-promotion that’s rife across other networks. As such, Facebook has vowed to take it slow with its Instagram monetization plans - last week, during Facebook’s Q2 announcement, Facebook COO Sheryl Sandberg noted:

“[We’re looking to introduce] more formats, like direct response, and more ways to buy, like self-serve. That said - and it’s important to understand this – while we think there’s a lot of interest and great opportunity, we’re going to be really thoughtful and strategic about how we ramp revenue”

 The approach is logical, and is likely borne, at least in some capacity, from Facebook’s experience in making big changes on The Social Network – which, for the most part, have been received okay, but have caused fluctuations and migrations amongst specific demographic groups. Facebook knows that audience attention can, and will, shift, and they’re taking a cautious approach on Instagram as a result.

Slowly but Surely

Via the ads API, the next stage of Instagram’s monetization will slowly filter through the network. That influx will set the stage for the next wave, and the next after that. Given this, Instagram users may rightfully be concerned about a glut of ads set to inundate their streams – but by rolling out their ad offerings in this way, Instagram can respond to any audience concerns quickly, by simply slowing down the flow of ads and ensuring they don’t jeopardize the existing user experience. In this sense, Instagram benefits massively from being part of the wider Facebook family – had the platform gone it alone and, inevitably, conducted their own IPO and become a listed company, they’d now be under significant pressure to monetize faster and demonstrate growth – the way Twitter is right now.

This being the case, the more calculated roll-out of Instagram’s ad offerings is a good thing for both users and advertisers. For users, they won’t get hammered with ads, which would ultimately push more of them across to another network, enabling it to become the next big thing. And for advertisers, it means ad effectiveness will be maximized. As each option is introduced and tested, ad partners will get increased data on what works and what doesn’t, meaning that as further ad offerings are opened up, they’ll have been more developed, and will likely better align with user expectations, ensuring they’re better received.

Instagram Opens Ad API Partner Program – Continues Shift Towards Monetization | Social Media Today

Examples of Instagram’s direct response ads (via Instagram)

My API

So, you wanna’ start advertising on Instagram now? The best way to do it is to look into how your company might be able to work with the announced partners and platforms in order to utilize their Instagram ad offerings. Those options won’t be for everyone, they’ll likely be restrictive for some smaller ad partners – but as noted, that’s kind of the point. That said, the potential of utilizing the knowledge of existing Facebook ad partners and Facebook ad targeting options in alignment with Instagram ads is exciting – in a Salesforce blog post on the Instagram API announcement, they note some of the success stories they’ve seen with clients who’ve synched their e-mail lists with digital advertising:

·  Amusement park operator Cedar Fair saw 3X ROI by marketing season passes to last year's day-pass holders, and to lookalikes of last year's day-pass holders.

·  An online retailer reached 77% more of its email list by adding efficient Facebook advertising. The company saw a 17:1 ROI on ads that reached email openers, and immediately implemented coordinated email and Facebook advertising as an always-on tactic.

·  An apparel retailer earned a 10:1 ROI (return on ad spend) by reaching customers who had recently signed up for email in a store, and inviting them to shop online.

·  Apartments.com saw a 35% increase in engagement rates and 30% lower cost to drive traffic to its promotion using Active Audiences to reach subscribers and lookalikes.

Those are some impressive stats, and they highlight the opportunities for advertisers in being able to utilize existing Facebook ad options with the Instagram audience.

While these initial ad options won’t cover all use-cases – and there’s significant pent-up demand for Instagram advertising – it’s an opening to wider expansion of the Instagram platform, and the next step towards increased monetization of the network, monetization that could see it  generate $600 million in ad sales, eclipsing mobile display spend on Google and Twitter, within two years.

But more than anything else, Instagram’s approach to monetization shows something of a maturation of the social media marketplace. As noted, being within the wider group of Facebook properties helps, but as the industry develops, the old Facebook-coined adage of “move fast and break things” seems to be less and less en vogue. Now, given the advanced social media marketplace and the discernable impacts of audience migrations, we may be moving towards a new phase, where “move slowly and improve things” is the more aligned with the order of the day.

Main image via tulpahn / Shutterstock

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