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Instagram Announces 500K Advertisers; What’s Next?



On Wednesday, photo sharing app Instagram announced 500k active advertisers on the platform; more than double the numbers reported in February. Is Instagram leading the pack? Or are they following trends? What’s going on with digital advertising?

Instagram Announces 500K Advertisers; What's Next?

Advertising isn’t a new concept. Marketers have been influencing buying decisions for centuries. In fact, the first published ad showed up just on the heels of the first published newspaper, The Boston News-Letter, in 1704, and sought a buyer for a Long Island Estate on Oyster Bay.

Since then, advertising has gone from newspapers to direct mail to phone books, billboards, mascots, and sponsorships… “Traditional advertising”.  But as technology improves, so does the ability to reach audiences. Advertisers, brands, celebrities, and friends are all competing for our attention. And the platforms with the largest user bases will draw in the most advertisers.

Enter Instagram.

After launching its ad program in September of 2015, Instagram reported 200k advertisers in February, just five months later. What’s even more impressive is that IG has not only maintained that number, but more than doubled it! The Facebook owned photo app reported Wednesday that 500k advertisers are active monthly. They didn’t just run an ad once and forget to come back.

That’s impressive.

But the truth is Instagram is just following the rest of the internet. Online advertising is everywhere we go. So what can we expect next from IG and the rest of the web? Let’s take a look.

1) Mobile: Internet ad revenue hit $60 billion in 2015, more than a 20 percent increase over 2014. Mobile ad revenue grew by more than 66 percent, while desktop was up just 5 percent.

Phones are getting bigger. Well, at least their screens. And while mobile ad spend is rising, marketers are also building campaigns around those mobile devices. Layouts are made with a 6” screen in mind. Even websites are building around mobile. Facebook recently launched mobile lead ads, where users simply tap an ad, tap again to confirm their user info (already populated), and they receive their instant download or discount.

Filling that information out on a mobile device took 38% longer than on desktop, leading to a drop in conversions for advertisers on mobile devices. Now, mobile is converting higher than desktop ads. And that won’t change anytime soon.

2) Video: Ads themselves are evolving. Video ads, especially short video ads, are converting. Between Q3 2012 and Q3 2014, smartphone and tablet video consumption grew 400 percent and now accounts for more than 30 percent of all online videos played, according to Ooyala’s Global Video Index.

Companies are utilizing smart, funny, creative videos to attract attention and build their brand. Whether on YouTube, Snapchat, Vine, Facebook or Instagram, video advertising will only continue to grow.

3) Native Advertising: Users don’t like to be “sold to”. When an ad is blatantly advertising, it can be a turnoff.

“Buy this!”

“SuperMegaAwesome Sprinkles are now 40% More SuperMegaAwesome-y!”

You get the picture.

Think of Native advertising as a “sponsored post”. A brand promotes a story, status, tweet, blog post, or video they created for the social property the user is visiting. For example, sharing a 140 character tweet won’t do you much good on Instagram, but promoting it on Twitter.can be useful. Facebook has really mastered the art of the sponsored post, using tight advertising regulations to make users feel more connected to ads they’re seeing. Which is why these ads get users to take action so much more frequently.

While the future of digital advertising is a conversation that can go on for days, these three trends are more than just trends. They’re foundations for advertisers to build on. The average person spends about 6 hours a day online, of which about 2 of those hours are spent on social networks. Advertisers will find us where we spend the most time. And they’ll be very sneaky in how they do it. Having brought in $5.6 billion in Q1 of 2016 alone, Facebook is still king in the social media space. Look for FB to lead the way there.

Do you think shareholders like the changes? It sure seems so.

Facebook (FB) shares are up since Instagram’s announcement.

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