Ads, Algorithms, and Influencers and the Changing Instagram Marketing Landscape
Marketing Social Media

What Is the Future of Ads on Instagram Marketing?

4 Minute Read

The Instagram community is 500 million users strong, and companies big and small are eager to get a share of those eyeballs. For brands, however, the challenge is determining if their Instagram marketing efforts are effective. Are they building a relevant audience? Are they capturing and converting new leads? Driving ROI?

Instagram’s new features for businesses should help answer those questions—and potentially make them less reliant on working with influencers.

The new tools to help brands “stand out, get insights and find new customers” include business profiles, analytics, and the option to turn a post into an ad from right within the app. Instagram noted it interviewed hundreds of businesses to shape the new tools. The powerful analytics could sway companies to invest more in the mobile-oriented platform. There’s one catch: Other users (including influencers or celebrities) won’t receive the analytics capabilities.

The New Features—and the New Algorithm

The tools announced are reminiscent of parent company Facebook’s tools for brands. Businesses will be able to create profiles, a free feature. From there, companies can choose how customers can contact them: via call, text, or email. Users can get directions to the businesses, too.

Along with the business profile designation comes enhanced analytics, which Instagram calls Insights. Businesses will see “actionable information” within the mobile app with things like top-performing posts, reach, and impressions, and follower data including gender, age, and location, TechCrunch reports. Businesses must already have a business page on Facebook in order to get the new tools, a further sign of integration between the two platforms.

Instagram Insights

Armed with Insights, brands can convert high-performing posts into ads directly within the app. Brands can choose their target audience or allow Instagram to suggest one. Overall, the tools allow companies to manage their Instagram presence and act on analytics on the go within a few taps.

The tools seemingly complement Instagram’s algorithm changes, which rearrange the “best,” more relevant posts at the top of a user’s feed, instead of the most recent posts. On average, users miss 70 percent of their feeds, Instagram says, and reordering posts based on relevance to the user should help with that.

However, if the algorithm prioritizes posts from friends over brands, that could harm brands’ ability to engage with users. The new business tools—and the easy access to creating sponsored posts—could help assuage those fears (while nudging brands to open their pocketbooks).

Notably, the business features won’t be available to the non-business user—meaning neither celebrities with massive followings nor micro-influencers will be able to access data about who interacts with their posts. Of course, this could change at some point. According to TechCrunch, Instagram is testing Insights with verified accounts with large followings.

Ads vs. Influencers

By offering analytics, Instagram is hoping to make it easier for brands to see what’s working for them—and encourage them to spend money to make their efforts go even further.

Research shows those ads can be particularly effective on Instagram. Users tend to “like” branded content at the same level they do non-branded content, a study from Markerly found. In fact, content from brands with over 250,000 followers actually earned more likes than content from non-sponsored users with similar-sized followings.

Instagram likes on sponsored content

On the other hand, sponsored content earned fewer comments than non-sponsored posts. That could be because not all sponsored content is created equally, Markerly suggested. Posts with text on photos, unnatural product placements, and shoddy photography correlated with fewer comments.

Instagram comments on sponsored content

In other words, the less the content feels like an ad, the more likely users will engage with it in the same ways they do regular content.

Fortunately for brands, the Instagram environment seems tailor-made to help users forget they’re interacting with an ad. Sponsored content appears in your feed almost in a disguise. Although boosted posts are labeled, it’s easy to ignore the ad designation when you’re more focused on the images rapidly scrolling by.

The missing piece of this puzzle, however, is influencers. Sure, users apparently don’t mind sponsored content on Instagram. But they might be more persuaded to engage with content (and subsequently try a product) if a recommendation comes from someone they trust. Research has shown that micro-influencers (those with between 1,000 to 2,000 followers) tend to have more engagement than accounts with larger numbers of followers. So, even if users are open to engaging with ads on Instagram, they may be even more interested in compelling content from a micro-influencer.

Still, until Instagram opens up analytics to more users (including influencers), brands will see definite advantages from sponsoring their own posts. They’ll have rich data to assess their efforts and make tweaks as they learn more about their audience and what they like. They’ll have to pay for the privilege, but in a data-driven world the expense might very well be worth it.

Ad Invasion?

For users, the end result of all these changes is likely more sponsored content. Instagram has already expanded the type of ads businesses can create, including 60-second video ads and video carousel ads, a format that allows users to swipe through multiple videos or images.

Too much sponsored content, or poorly constructed content, could result in an ad backlash on the platform. Users don’t like ads, period. Instagram has to carefully balance user tolerance for ads while expanding its offerings to businesses. Brands, too, need to tread carefully. The best Instagram marketing content doesn’t look or feel like an ad—rather, it mimics the type of high-quality content created by users and publishers on the platform. Just because brands can now easily create ads on Instagram doesn’t automatically mean those ads will be effective.

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Krystal Overmyer is a freelance journalist specializing in digital marketing trends. Her experience spans over a decade in journalism, public relations, and digital communications.

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