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Instagram, the later-comer to the social media advertising space, has been beefing up its advertising options since October 2013. As all other late-comers to any industry, Instagram has reaped the benefits of the trials and errors other social media networks have experienced with their own advertising options. Plus, their acquisition in 2012 by Facebook likely gave the company even further insight into which ads work best for advertisers — as well as which ads users on the platform don’t mind.

This is a big deal for a lot of reasons. Take the publishing industry as just one example. With media, the need to monetize via advertising is paramount to overall business strategy and success. Yet, the internet age has posed quite the predicament: online users click on ads much less often, and impressions aren’t exactly an advertiser’s preferred measurement of success for the web — even though number of impressions is the only way these same advertisers measure success with printed ads. This double-edged sword has caused the mass shuttering of many long-standing publications, or at the very least a mass cut to their staffing capabilities.

Social media, though, has proven to be a viable advertising outlet for publishers, earning them valuable new audiences. New audiences often mean an increased number of ad impressions on their sites, which may then translate to higher click-thru rates for those ads — ultimately increasing revenue for the publisher itself. Of course, social media advertising does this for anyone advertising on the platforms, and arguably it does it best for small businesses. After all, there are some 2 million advertisers on Facebook, a large portion of which are likely SMBs due to Facebook’s verbal dedication to turning SMBs into smart advertisers.

So, what makes Instagram different? What has the platform learned? Well, for one, that users don’t like to be sold to — at least not in a sales-y way. They also don’t like being tricked into clicking on something that will take them away from their current online experience. We’re seeing this trend take hold in ecommerce as well, as buy buttons pop up across the internet, allowing consumers to purchase without ever leaving Pinterest, for instance. For brands themselves, however — both those advertising, and those ecommerce stores looking to scale — pigeon-holed user experiences aren’t ideal. If users aren’t clicking back to your site, you are losing valuable brand experience and awareness. Now, consumers may simply know your brand as the one that sells that one purse they bought, or the one that posts a cool picture on Instagram every so often.

That doesn’t make for a very strong relationship, and rarely will such a brand become a household name.

Since 2013, Instagram has been skillfully walking the line between consumer preference and advertiser needs. The social platform’s first advertising offering didn’t allow for any linkbacks on the photo itself. The only options brands had was to put one in their bio on their profile page. In March of this year, however, Instagram introduced a clickable carousel, finally allowing brands advertising on the platform access to a clickable photo. Because Instagram waited so long to introduce this feature, and because brands have become much more Insta-savvy as far as what their followers on that platform prefer, these clickable ads didn’t annoy or bother the user base.

As of this week, it turns out that finding the perfect balance between advertiser and user wants is extremely profitable. Instagram ads will bring in $595 million in mobile revenues worldwide this year, according to eMarketer’s first-ever forecast of how much advertisers will spend on the social network. By 2017, Instagram’s global mobile ad revenues will reach $2.81 billion, accounting for more than 10% of parent company Facebook’s global ad revenues.

“Now that Instagram is opening up, there is a lot of pent-up demand,” said Debra Aho Williamson, eMarketer’s principal analyst. “The rollout of new features over the next several months means that by the end of 2015, Instagram will have a host of new ad products for advertisers large and small. In particular, Instagram advertisers will be able to use a full slate of Facebook targeting tools, including the popular Custom Audiences feature. That will be a key drawing card.”

Yes, you read that right: Instagram is actively looking for ways to open up the platform for SMB advertising. Currently, the platform is a better fit for larger brands, mostly because they are the only ones who can afford the reported $200,000 price tag.

“We’ve spent the last 18 months establishing the platform for large brands,” said Jim Squires, the director of marketing operations at Instagram. “The next logical step is to empower businesses of all sizes. Being able to target narrower segments and achieve different types of objectives is essential. We want to offer a complete solution that allows businesses to purchase through self-serve interfaces and achieve the objectives they want to achieve. We’re testing the action-oriented formats and buying through the API now, and we will be doing that through the summer with select partners and clients. Then, we’ll be opening up globally and to all advertisers in the early fall timeframe.

In all, SMBs looking to utilize social media advertising this fall for holiday promotion and to acquire new customers should think about allocating some of their spend toward Instagram. After all, Instagram claims to have 300 million monthly active users and engagement on the platform is about 15x that of Facebook.

For brands looking to utilize the new advertising offerings, here are a few best practices to help maintain a loyal Instagram following without being overtly salesy in your advertising:

  • Use ads for marketing campaigns only: Not every post needs to be an ad. Follow a 80:20 ratio for lifestyle versus advertising content on the platform. You can always use your best image as an ad and then support that image with non-advertised photos throughout your campaign. Use a link on your profile page to capture all audiences who miss the clickable ad, but follow your brand or your campaign.
  • Put your product in context: A beautiful, high res image of your product on a white background is nice, but if you put that product in context — say, sunglasses on a smiling woman on a beautiful beach with her friends — fans are more likely to relate with or aspire to that image. Instagram photos that perform best showcase lifestyle stories, not static images.
  • Don’t overdo the branding: Let your fans connect the dots with how that product will fit into their lives and they’ll be more likely to want to buy. This hints back at the “putting your product in context” messaging. Don’t overly sell your items. Instead, showcase how they are part of a larger lifestyle, sans much branding, and you’re more likely to get an increased number of click-thrus.

Stay tuned. As soon as the new advertising platform launches for SMBs, we’ll be reporting on the details for you to get up and running, and producing ROI as soon as possible.

Photo: Instagram Blog

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