Instagram: The Advertising Frontier
Source: https://blog.payumoney.com/how-to-create-marketing-strategy-for-instagram/
Instagram is a fundamental part of the 21st century and has single-handedly reshaped the way we interact with each other. Its online prevalence is astounding; as of 2018, 1 billion users were reported to use Instagram monthly to share their photos and short videos. Along with Instagram’s swift rise in popularity, it has also faced an exponential rise in wealth as it was estimated to be valued at 100 billion dollars in 2018 from its initial net worth of 1 billion dollars in 2012. In short, Instagram’s cult-like popularity makes it a goldmine for advertisers and businesses looking to enhance their online engagement with the consumer market. They do this with the help of the revolutionary walking advertisement: the influencer. The recent developments in online advertising beg the question, is Instagram the new advertising frontier or is it simply a transient phase in digital marketing?
Instagram can be used to connect with friends, family, celebrities, and a new public figure: the influencer. An influencer is defined as an individual who is able to influence consumer product choices through promotion on social media networks. Why exactly is the influencer more capable than traditional digital advertisements in influencing the product demand of consumers? This can be explained by American economist Thorstein Veblen, who argues that an individual’s consumer behaviour is inspired by the consumer behaviour of those who have a higher socio-economic status. In this regard, Instagram becomes the prime platform for affluent and trend-setting influencers to display the latest products with appealing snapshots that tastefully display the newest technologies, the most luxurious retreats, and other products and services that would inspire their audience of followers.
Source: https://bloggingwizard.com/instagram-for-business/
It is no question that influencers generate revenue through sponsorships and brand partnerships; Kylie Jenner is reported to be the highest paid influencer on Instagram and is paid roughly $1.3 million per post. Typically, influencer rates are determined through factors such as engagement rates, followers, and the scope/time-frame of the partnership. Most marketing success is found through “peer-to-peer marketing”, which is marketing through micro-influencers. Micro-influencers are characterized as having fewer followers in comparison to well-known influencers, but are known to have more follower engagement when compared to their more established counterparts. As a result of this booming business for influencers, the influencer market is now valued at over 1 billion dollars, while Instagram’s ad revenue in the US alone is estimated to be 9 billion dollars.
Source: https://medium.com/payumoney/what-is-instagram-for-your-business-and-its-benefits-for-you-47de5b1b9bec
Instagram’s peer-to-peer marketing approach through the influencer has outdone other digital competitors. Streaming services and other social media networks have advertising models that enable potential consumers to manually opt out of consuming advertisements. For example, Facebook users can manually opt out of the advertisements that appear on their feed as a result of the posts that they have liked or the information on their profile. Other social media users can also opt out of advertisements through ad-blocking software, premium access to content with no advertisements, and ad-skipping options.
However, on Instagram users cannot opt out of the advertisements presented by brands, influencers, and celebrities. Instagram’s advertisement-friendly platform hosts sponsored posts by influencers and brands that are not only tolerated by Instagram users, but also directly influence their demand as consumers. For example, it was reported that 75% of Instagram users admitted to being influenced by another user’s post to buy something online. In fact, levels of user engagement with sponsored posts have little to no difference in comparison to the levels of user engagement from non-sponsored photos. In order to utilize this user engagement, Instagram created a feature for brands and influencers to add product tags onto their posts so that potential consumers could be redirected to the website immediately for purchase. This suggests the unprecedented power of the influencer over traditional forms of online marketing.
Despite the evidence in favour of Instagram’s superiority over other forms of online advertising, reports have surfaced that suggest in-app advertisements may not be as utopian as they initially appeared to be. According to a study performed by Medium in 2019, a 44% decrease in engagement with posts by influencers was reported along with an 18% decrease in engagement with brand posts, which suggests that less people are liking, commenting, and sharing posts by influencers and brands. This indicates that the saturation of brand accounts, influencers, and advertisements on Instagram may undo the advantages that serve the platform in the first place. The relatively high supply of sponsored posts can result in consumerism fatigue, which would ultimately decrease consumer demand for the products being promoted through Instagram. Thus, in light of Instagram’s success, consumer fatigue is an important consideration for individual advertisers and for the aggregate advertising market on Instagram moving forward.
Notwithstanding, Instagram is still an effective advertising tool for brands and businesses looking to gain a competitive edge in online marketing. The advent of the “Influencer” has also transformed Instagram’s advertising model because it has created a form of marketing that engages directly with potential consumers on Instagram. While Instagram still has its fair share of potential concerns on the marginal benefit of its social-media based advertising model, it has proven itself to be an innovative brand digital marketing in a world rife with advertisements.