Could Instagram Innovate Native Advertising?
User-led innovation is a hot trend nowadays and capitalizes on the "intelligence" of the crowd, while at the same time accommodating the evolving interests of different users. While companies like Threadless, InnoCentive, iStockphoto and Flickr, among others, may be considered pioneers in user-led innovation, more and more companies are acknowledging the power of the crowd in their product and service delivery strategies. Instagram has a great advantage over all of these: it's financed by the biggest social network and, thus, could potentially tap on the intelligence of a bigger crowd of users.
Instagram could revolutionize the delivery of native-style ads — and potentially the pricing models for such ads — by providing customized offerings based on what people talk about, do and share on Facebook. There are two dimensions to this strategy. First, users should be allowed to actively participate in the way such ad offerings are designed and delivered. At the moment the focus is on delivery alone. By allowing users to participate in the design, Instagram will be opening up the doors of creativity, while accommodating users’ needs and interests. This has been one of the big success factors in other user-led innovation models.
Second, this user activity should be added as an additional metric to the target, reach and frequency optimization models that Instagram adopts to construct its pricing models while offering a more dynamic picture to advertisers as to how those models are built. Once again, this would help justify the pricing models while contributing to the success of the marketing campaign.
Certainly Instagram (and Facebook) will need to tread carefully with such a strategy given recent concerns over the use of ads in social networks as well as broader privacy concerns. However, through some initial iterations with key identified users and advertisers, Instagram would be in a better position to start developing a strong strategy.