Could Instagram Innovate Native Advertising?
Instagram, the mobile photo-sharing service which was bought by Facebook in 2012, has announced plans to expand advertising to the U.K., Canada and Australia later this year, after having launched ads to its U.S. audience in November 2013. Instagram has over 200 million users worldwide, enabling them to take photos and then use various photo-editing tools before sharing those photos across multiple social networks that accept the mobile service.
Instagram's efforts to boost its ad offerings comes at a time of increasing competition from social media companies like Twitter and Pinterest that share a vision for how native advertising can improve the state of mobile app monetization for marketers, app developers and users.
What makes Instagram's native-style ads valuable is the fact that they flow through a news stream where users see photos one at a time as they scroll through, thus allowing for more exposure. At the same time, this approach is also disrupting the user experience.
That's why Instagram has set the bar high for creative ads, pushing prospective advertisers to produce high-quality, almost print-worthy images that fit the aesthetic of the mobile service. Instagram ads will target people who don't follow a specific brand. The ads will be differentiated with the word "sponsored" at the top of the image. Users will be able to hide them by tapping a symbol at the bottom of the photo, which will help filter ads in the future.
However innovative it may seem, some have questioned the pricing model Instagram is offering to advertisers. Reportedly, the ads could sell for monthly fees well into six figures depending on the reach and frequency sought. The pricing model could push advertisers to start narrowing their target audience and thus minimizing their reach. More critically, by getting the target audience wrong, advertisers and Instagram may risk intruding into the privacy of those that don't want to be reached, possibly risking actual use of the mobile service. So, a question remains: How innovative can Instagram be with its native-style ads, and should it involve users in the innovation process?