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EMarketer Instagram Advertising What Marketers Need To Know
EMarketer Instagram Advertising What Marketers Need To Know
ADVERTISING
What Marketers Need to Know
JULY 2015
Debra Aho Williamson
Contributors: Danielle Drolet, Jeremy Kressman, Maria Minsker, Corey McNair, Martín Utreras,
Haixia Wang
Read this on
eMarketer for iPad
INSTAGRAM ADVERTISING: WHAT MARKETERS NEED TO KNOW
Instagram will soon carry a lot more advertising. Direct-response buttons, an API for ad buying and Facebook-style
targeting capabilities will give advertisers new ways to buy and will lead to rapid increases in ad spending on the
photo-focused social network. eMarketer forecasts Instagram will have $595 million in ad revenue this year, rising to
$2.81 billion in 2017.
INSTAGRAM ADVERTISING: WHAT MARKETERS NEED TO KNOW ©2015 EMARKETER INC. ALL RIGHTS RESERVED 2
NEW AD PRODUCTS WILL LEAD TO EMARKETER’S INSTAGRAM AD
RAPID REVENUE GAINS REVENUE FORECAST
Instagram’s ad business will ramp up rapidly this Based on expected demand, eMarketer predicts
year, expanding beyond branding to include Instagram will garner $595 million in ad revenue this year
and more than $2.8 billion in 2017.
direct-response ad units, the ability to buy ads
via an API, and enhanced measurement and Instagram’s ad revenue is currently all from mobile. It
targeting features. will make up 5% of Facebook’s worldwide mobile ad
revenue this year and 14% of that total in 2017, eMarketer
Those features will roll out over the next several months, forecasts. In the US, Instagram will account for 10.7% of
and by the end of 2015 Instagram will have a full slate of Facebook’s mobile ad revenue in 2015 and 28% in 2017.
ad products for advertisers large and small.
“We’ve spent the last 18 months establishing the Instagram Net Mobile Ad Revenue Share of Facebook
Mobile Ad Revenues Worldwide, US vs. Non-US,
platform for large brands. The next logical step is to 2015-2017
empower businesses of all sizes to be able to achieve 2015 2016 2017
their objectives,” said Jim Squires, Instagram’s director of % of US Facebook net mobile ad revenues 10.7% 20.1% 28.0%
market operations. % of non-US Facebook net mobile ad revenues 0.5% 1.3% 3.7%
% of Facebook net mobile ad 5.0% 9.5% 14.0%
Many companies will be eager to test the social revenues worldwide
network’s new features. Instagram advertising was Note: paid advertising only; excludes spending by marketers that goes
toward developing or maintaining an Instagram presence
previously a rare commodity, reserved for McDonald’s, Source: eMarketer, July 2015
L’Oréal, Mercedes-Benz and other brands that were 193349 www.eMarketer.com
willing to spend a flat rate of $200,000 to conduct a As the percentages above imply, international revenue is
campaign. Instagram offered those advertisers a limited limited. eMarketer predicts just 5% of Instagram’s total
assortment of image ads, 15-second video ads, and the mobile ad revenue will come from outside the US this
newest feature, carousel ads, which can display more year. The US will account for the vast majority of revenue
than one image. throughout the three-year forecast period, even as
international revenue swells to 15% of the total in 2017.
Now that Instagram is opening up to more advertisers, it’s
likely to find a lot of pent-up demand.
Instagram Net Mobile Ad Revenues Worldwide, US vs.
Non-US, 2015-2017
“Instagram is probably [our] favorite platform right now billions, % change and % of total
in terms of pioneering and being willing to try new 2015 2016 2017
things,” said Roderick Strother, director of worldwide
US $0.57 $1.37 $2.39
digital and social at Lenovo, whose Australian arm —% change - 142% 75%
recently conducted its first Instagram ad campaign. “The —% of total 95% 92% 85%
importance of Instagram has grown tremendously for us.” Non-US $0.03 $0.12 $0.42
—% change - 299% 255%
Instagram has “what a lot of marketers see as the most —% of total 5% 8% 15%
compelling package: audience plus strong engagement Worldwide $0.60 $1.48 $2.81
plus strong brand awareness,” said Victor Pineiro, vice —% change - 149% 90%
president of social media at digital agency Big Spaceship. Note: paid advertising only; excludes spending by marketers that goes
toward developing or maintaining an Instagram presence
Source: eMarketer, July 2015
193279 www.eMarketer.com
INSTAGRAM ADVERTISING: WHAT MARKETERS NEED TO KNOW ©2015 EMARKETER INC. ALL RIGHTS RESERVED 3
Instagram, Google and Twitter Net US Mobile Display Social Media Sites* Where US Marketers Would Be
Ad Revenues, 2015-2017 Interested in Allocating Their Ad Budget, Feb 2015
billions % of respondents
$2.38 $2.39
$2.29 Instagram 72%
Pinterest 46%
$1.89
$1.72 LinkedIn 41%
$1.47 Google+ 28%
$1.37
$1.19 Tumblr 26%
reddit 14%
$0.57 7% StumbleUpon
6% Other
INSTAGRAM ADVERTISING: WHAT MARKETERS NEED TO KNOW ©2015 EMARKETER INC. ALL RIGHTS RESERVED 4
Salesforce Marketing Cloud found in a November 2014
study that 34% of marketers it polled worldwide were
WHAT MARKETERS NEED TO
using Instagram—the same percentage that used blogs, KNOW ABOUT USERS
but well behind the response rate for use of Facebook,
Twitter, LinkedIn, Google+ and YouTube. Instagram is a fast-growing property. Its user base
skews young, and it has become a home for people
Leading Social Media Channels Used by Marketers to explore their passions and interests, as well as to
Worldwide, Nov 2014 connect with friends, both ones they’ve met in real
% of respondents
life and ones they haven’t.
Facebook 80%
Twitter 70%
Key things to know about Instagram usage include:
LinkedIn 62%
■■ The number of US users is substantial and growing.
Google+ 56%
64.2
40.2 32.3% 33.6%
24.2% 30.3%
27.6%
20.1%
12.7%
10.6%
20.9% 7.4%
5.0%
15.1%
Note: internet users who access their Instagram account via any device at
least once per month
Source: eMarketer, Feb 2015
184685 www.eMarketer.com
INSTAGRAM ADVERTISING: WHAT MARKETERS NEED TO KNOW ©2015 EMARKETER INC. ALL RIGHTS RESERVED 5
Propelled by a nearly 60% gain in users, Instagram Despite Instagram’s growth, its usage remains far below
surpassed Twitter to become the second-largest social that of its parent, Facebook—at least among adults. In
network in the US in 2014. By comparison, Twitter’s US comScore MobiLens’ May 2015 ranking of top apps, it
user base grew just 12.1% in 2014, eMarketer estimates. placed ninth, with 36.6% of US smartphone app users
ages 18 and older using it. Facebook had nearly double
that reach (70.2%), and several Google services as
US Social Network Users and Penetration, by Site,
2013-2019 well as Facebook’s own Messenger ranked higher in
millions, % change and % of population comScore’s list.
2013 2014 2015 2016 2017 2018 2019
Facebook 147.5 152.4 157.1 161.4 165.7 169.2 172.0
—% change
—% of population
4.2% 3.4% 3.0% 2.8% 2.6%
46.6% 47.8% 48.9% 49.8% 50.7% 51.4% 51.8%
2.1% 1.7%
INTERNATIONAL GROWTH ISN’T A GIVEN
Instagram 40.2 64.2 77.6 89.4 98.9 106.2 111.6 Worldwide, Instagram has 300 million monthly active
—% change 93.6% 59.9% 20.9% 15.1% 10.6% 7.4% 5.0% users, according to its own tally, with more than 70%
—% of population 12.7% 20.1% 24.2% 27.6% 30.3% 32.3% 33.6% coming from outside the US. eMarketer has yet to
Twitter 43.2 48.4 53.1 57.6 62.0 66.1 69.1
publish a forecast for worldwide Instagram usage, but
—% change 19.4% 12.1% 9.6% 8.6% 7.6% 6.6% 4.6%
it’s worth noting some key differences in our forecasting
—% of population 13.6% 15.2% 16.5% 17.8% 19.0% 20.1% 20.8%
methodology compared to Instagram’s.
Pinterest 34.9 42.3 47.1 50.7 53.9 56.8 59.3
—% change 34.5% 21.2% 11.4% 7.7% 6.3% 5.4% 4.2%
eMarketer estimates the number of individuals who
—% of population 11.0% 13.3% 14.6% 15.7% 16.5% 17.3% 17.9%
Tumblr 13.7 17.7 20.0 22.2 23.8 25.4 26.6
use a property monthly. We exclude business accounts
—% change 46.2% 29.2% 12.9% 11.0% 7.2% 6.5% 4.8% and multiple accounts by individual users, and discount
—% of population 4.3% 5.6% 6.2% 6.9% 7.3% 7.7% 8.0% for potential fake accounts and bots. That explains why
Total 165.7 173.6 180.3 186.0 191.2 195.9 200.1 eMarketer’s US user estimate is 77.6 million users this
Note: internet users who access their Facebook, Twitter, Pinterest, year, while Instagram’s figures imply a US user base of
Instagram and/or Tumblr accounts via any device at least once per month;
social networking audiences are not mutually exclusive; there is overlap 90 million (and a non-US user base of 210 million).
between groups
Source: eMarketer, Feb 2015; confirmed and republished, July 2015
184672 www.eMarketer.com
Instagram is definitely growing, and its international user
base is substantial, but it is less popular around the world
Teens in particular are heavily represented on Instagram. than other social platforms. For instance, a February 2015
In 2013, 67% of US smartphone users ages 12 to 17 study by Reuters Institute for the Study of Journalism at
used the service at least monthly, eMarketer calculates. the University of Oxford found that 14% of internet users
This year, 89.6% of that cohort will do so. Among in 12 countries examined used Instagram, compared
US smartphone users ages 18 to 24, 57.5% will use to 65% using Facebook, 57% on YouTube, 27% using
Instagram this year, up from 39.0% two years ago. WhatsApp (another Facebook property) and 21%
on Twitter.
US Instagram User Penetration, by Age, 2013-2019
% of smartphone users in each group Although eMarketer considers Instagram to be a social
2013 2014 2015 2016 2017 2018 2019 network rather than a messaging service, the fact that it
0-11 15.1% 20.7% 19.9% 20.1% 20.7% 21.4% 22.3% is predominantly a mobile app puts it in close competition
12-17 67.0% 87.4% 89.6% 90.9% 90.7% 91.1% 91.7% with those services.
18-24 39.0% 53.1% 57.5% 61.4% 64.9% 68.2% 71.1%
25-34 37.1% 48.1% 53.1% 57.5% 61.1% 63.3% 65.2% According to GlobalWebIndex, Instagram’s worldwide
35-44 17.1% 27.8% 32.0% 34.6% 37.1% 39.6% 40.2% user base grew more slowly than that of Pinterest or
45-54 15.1% 21.4% 25.2% 27.5% 29.6% 30.9% 32.3% Tumblr in the period from Q2 2014 through Q1 2015.
55-64 13.2% 19.2% 22.0% 24.7% 26.5% 28.3% 28.8% Instagram’s active user tally rose 46%, compared to 97%
65+ 6.1% 9.1% 10.5% 12.0% 12.3% 12.5% 12.4% for Pinterest and 94% for Tumblr.
Total 27.4% 37.6% 40.7% 43.1% 45.0% 46.4% 47.1%
Note: internet users who access their Instagram account via any device at
least once per month
Source: eMarketer, Feb 2015
184753 www.eMarketer.com
INSTAGRAM ADVERTISING: WHAT MARKETERS NEED TO KNOW ©2015 EMARKETER INC. ALL RIGHTS RESERVED 6
Leading Social Media Sites/Apps Worldwide, Ranked Social Media Sites on Which UK Social Media Users
by Growth in Active Users, Q1 2015 Have a Profile, Nov 2014
% change vs. Q2 2014 % of respondents
Pinterest Facebook
97% 97%
Tumblr Facebook only
94% 48%
Instagram Twitter
46% 26%
LinkedIn WhatsApp
39% 24%
YouTube YouTube
13% 17%
Twitter Instagram
8% 16%
Google+ LinkedIn
7% 14%
Facebook Google+
-8% 12%
Snapchat
Note: ages 16-64; used in the past month via any device; excludes China
Source: GlobalWebIndex, "Social Summary Q1 2015," May 5, 2015 9%
189709 www.eMarketer.com Pinterest
5%
Instagram faces a lot of competition outside the US,
Flickr
especially as mobile messaging apps such as Snapchat, 4%
Line and Facebook’s own WhatsApp and Messenger Myspace
gain strength. 4%
INSTAGRAM ADVERTISING: WHAT MARKETERS NEED TO KNOW ©2015 EMARKETER INC. ALL RIGHTS RESERVED 7
INSTAGRAM IS NOT FACEBOOK Teens from high-income families were the most likely
of any income group to use Instagram, with 56% of
According to comScore data cited by RBC in a June teens from the highest household income bracket using
2015 report, more than 96% of US Instagram users it—5 percentage points higher than any other income
over the past 12 months were also Facebook users. group—according to March 2015 polling by GfK for Pew
That extremely high figure runs counter to the common Research Center.
perception that Instagram users don’t tend to use
Facebook, or at least don’t use it that often. However, Demographic Profile of US Teen Instagram Users,
given that comScore defines usage broadly (i.e., a visit to March 2015
Facebook or Instagram at least once in a given month), % of respondents in each group
the overlap is probably reasonable. Gender
Female 61%
Another study, by Cowen and Company, backs this up. It Male 44%
found that 92% of the US Instagram users it surveyed in Age
June 2015 were also Facebook users. 13-14 44%
15-17 58%
Instagram’s Squires identified several areas where Instagram’s skew toward teens from high-income
Instagram differs from its parent: households diverges significantly from Facebook’s teen
audience, which leans toward lower-income household
■■ Community: “There’s this very distinct sense of brackets, according to Pew. Of teens in US households
community [on Instagram] that just continues to get earning $49,000 or less, more than three out of four are
stronger and stronger as the years have gone by,” on Facebook. A possible cause of this income-based
discrepancy: Facebook usage is not reliant on smartphone
he said.
ownership, unlike Instagram usage.
■■ Visuals: “It’s photos and video, versus other
Another key difference is the ability to have several
platforms where there is text content and a variety of
accounts on Instagram, something that Facebook
other formats.” frowns upon. Instagram users can set up accounts
for various passions or friend groups. Rather than
■■ Creativity: “The creative tools, like the filters and the
funneling everything into one identity, as people tend to
image tools that are available, have driven people to do do on Facebook, Instagram lets them express several
much more interesting, aesthetically pleasing things sides of themselves independently. For advertisers
inside the environment.” considering how to target people on Instagram, this is an
important distinction.
■■ Discovery: “People are looking for inspiration and
discovery. And in many cases the entities or people that
they follow are not people that they’ve met in the real
world. These are passion points for them.”
INSTAGRAM ADVERTISING: WHAT MARKETERS NEED TO KNOW ©2015 EMARKETER INC. ALL RIGHTS RESERVED 8
BRAND ENGAGEMENT IS HIGH— Social Media Metrics for US Fashion Brands, by Site,
Q2 2015
FOR NOW Facebook Instagram Twitter YouTube
Brand adoption 99% 96% 94% 87%
Marketers’ interest in Instagram has been fueled by —% change vs. same - 11% - -3%
studies showing high engagement with both organic period of prior year
marketing and paid ads. But it is not certain that this "Likes"/followers/ 2,170 1,014 880 25
subscribers (thousands)
will continue when more marketers and their ads enter
—% change vs. same 18% 160% 40% 63%
the system. period of prior year
Engagement rate* 0.09% 0.63% 0.02% -
On the organic side, one factor that has led to high brand —% change vs. same 6% -18% -9% -
period of prior year
engagement is that Instagram users have the potential
Views** (millions) - - - 13.0
to see every post from accounts they follow (provided
—% change vs. same - - - 44%
they log in regularly). This automatically leads to higher period of prior year
engagement. In contrast, Facebook’s algorithm reduces Post frequency (average 7.4 10.4 21.9 0.7
posts per week)
the likelihood of people seeing brands’ organic posts.
—% change vs. same -3% 36% 16% -6%
period of prior year
For example, home furnishings retailer Dot & Bo sees Note: among 79 fashion brands examined by L2 Think Tank; *includes
similar numbers of “likes” on its organic posts on comments, "likes" and shares for Facebook, "likes" and comments for
Instagram, favorites and retweets for Twitter; **includes effect of video
Instagram and on Facebook, even though it has only removal from brand channels
Source: L2 Think Tank, "Insights Report: Fashion: Social Media," May 21,
8,800 followers on Instagram vs. 620,000 on Facebook, 2015
said Allyson Campa, the company’s vice president of 191330 www.eMarketer.com
Facebook 27%
INSTAGRAM ADVERTISING: WHAT MARKETERS NEED TO KNOW ©2015 EMARKETER INC. ALL RIGHTS RESERVED 9
In addition to showing strong organic engagement, ad
engagement has also proven high, at least according
MAKING THE MOST OF
to several case studies published by Instagram. In a INSTAGRAM ADS
June 2015 blog post, Instagram cited several examples
of advertisers in Canada achieving brand lift of 14 to After a slow and carefully managed beta test,
45 points. Instagram will soon open its doors to more
advertising. But marketers should not expect those
“If you think about ad recall on the platform, it’s nearly
doors to be wide open.
three times what you would see across the industry,
generally speaking,” Instagram’s Squires said. Yes, Instagram will accept direct-response advertising,
and it will let advertisers use a self-serve platform or work
Whether those sorts of metrics stay high will depend
with an API partner to place ads. But the company won’t
on how the company handles the ad rollout and on how
be letting just any advertiser in.
marketers craft their pitches. Thus far, Instagram’s slow
and careful approach has cultivated a positive experience “Instagram has been very careful about opening
for both brands and users. The introduction of a lot more up the doors to advertising, and they’ve been very
advertising, especially ads that seem out of place in the discriminating, and rightfully so, to protect the integrity
Instagram environment, could irritate users and lead to of the space,” said Janet Keller, the advertising, digital,
usage declines. social media and CRM manager for General Motors’ GMC
division, one of the early brands to test advertising on
the platform.
INSTAGRAM ADVERTISING: WHAT MARKETERS NEED TO KNOW ©2015 EMARKETER INC. ALL RIGHTS RESERVED 10
THIS ISN’T TYPICAL INVENTORY MAY BE CONSTRAINED, LEADING TO HIGHER BID
PRICES: In interviews, executives expressed concern that
DIRECT-RESPONSE ADVERTISING Instagram will keep its ad inventory so limited that the
only direct-response advertisers that will win auctions will
Instagram is promoting a more muted approach to direct be those with deep enough pockets to place higher bids.
response, one that takes into account cues from users Instagram declined to comment on ad load, but keeping
before initiating a pitch. prices high would rule out many of the internet’s more
typical direct marketers.
Advertisers will be able to add four types of buttons to
their Instagram ads: “learn more,” “install now,” “sign up” THINK SUBTLE: Instagram’s buttons are small, and the
and “shop now.” Each button will open up a browser that actions they encourage are very specific. They are
takes the user to a page on the advertiser’s website, or to designed to support only a few types of engagement.
a location within one of the mobile app stores. Users will
be able to return to Instagram by tapping a back button or Advertisers might be wise to take cues from how
“X,” depending on their device. Instagram has incorporated the existing “learn more”
button into its carousel ad format. There, the button does
The ability to leave Instagram and then easily return is not appear on the first image, only on succeeding images.
new; previously, the only way a brand could direct users The user must show a certain level of engagement in
to its website was by referring them to its profile page, order to even see the button.
where users could then click a hyperlink.
“They obviously don’t want it to be a treasure trove
As part of the expansion into direct response, Instagram of gaming ads where people are just going to install
is also changing the way advertisers buy ads. Currently, Candy Crush all the time,” said Chris Jacob, director of
they must buy directly from Instagram on a fixed-price product marketing for Social.com and Active Audiences at
basis with guaranteed delivery. Salesforce.com.
By early autumn, advertisers will be able to use the same EVEN WITH SUBTLE PITCHES, USERS MAY STILL REBEL: The
methods and pricing structures as on Facebook. They reason some Instagram users started using the service
will be able to work with a wide range of API partners, in the first place was to avoid the ad clutter of places like
including 4C, Ampush, Brand Networks, Kenshoo, Facebook. They may not react positively to new types of
Laundry Service, MediaVest, Nanigans, Olapic, Resolution ads on Instagram.
Media, Salesforce.com, SocialCode, SocialMoov and
Unified Social. They can also buy through Facebook tools “Instagram is a completely closed system,” said Pineiro
such as Power Editor. Fixed-price ads will still be available. of Big Spaceship. “Many users report that they love
Instagram because they’re not being marketed to. I feel
“You’ll have all the different bid models and pricing that the core Instagram users, those heavy users, are
models that are available on the Facebook side also going to be quite put off by the idea that they’re going to
available to you on the Instagram side,” Squires said. start being led to other places.”
For those considering direct-response advertising on the TARGETING WILL BE IMPORTANT: There won’t be much
platform, here are some points to keep in mind: love for loud or aggressive direct-response pitches. “If,
on Instagram, you’re offering some value and it’s well
IMAGE MATTERS: “[Instagram’s] a very unforgiving
targeted, it’s relevant and it adds to the conversation, then
environment if you’re going in there with an image that
I think people are likely to react well to it,” said Strother
looks stale or spammy,” said Kevin Lange, senior vice
of Lenovo.
president of social media at Starcom MediaVest. “There’s
going to be some tried-and-true tactics, especially on the
direct-response side, that aren’t guaranteed to work.”
INSTAGRAM ADVERTISING: WHAT MARKETERS NEED TO KNOW ©2015 EMARKETER INC. ALL RIGHTS RESERVED 11
CREATIVITY WILL STILL BE VALUED— GO FOR “THUMB-STOPPING CREATIVE”: When promoting
its TV series “The Flash” last year, The CW constructed a
AND REWARDED 15-second video that showed a child on an airplane that
was speeding down the runway, interspersed with quick
Instagram and its advertisers to date have worked hard cuts of “Flash” imagery.
to ensure that their pitches meet a high bar of creativity.
Some have likened them to the glossy print ads in a “To try and do something that feels like Instagram and
high-end travel or fashion magazine. not like an ad has been a creative challenge for us,” said
Caty Burgess, vice president of media strategies at
Setting a high bar was quite intentional, and several The CW Television Network. “We talk a lot about what
executives interviewed by eMarketer reported that they ‘thumb-stopping’ creative is.”
received extensive help from Instagram when crafting
their brand campaigns. CONSIDER USING A DIFFERENT TEAM: Rather than using
digital creatives and digital buyers, marketers may want
For example, GMC worked closely with Instagram for to use resources more familiar with branding, such
an ad that used the carousel format. “We collaborated as those who work on TV campaigns, said Jacob of
with them directly and said, ‘Hey, how can you help Salesforce.com. “If those folks get involved in Instagram,
us, knowing what you know with the community, and then I think you’ll see a higher bar [of creativity] than you
knowing what you know in terms of what works with this might see from the pure digital execution ads you see in
community?” said Keller. digital display or the pure direct response you might see
on Facebook or Twitter.”
Instagram helped come up with the ad’s unique
format, which turned three carousel images into one EXPECT SOME CREATIVE LEEWAY: Because Instagram
panorama-type image, Keller said. won’t be reviewing and approving each ad, the reality
is that there will probably be somewhat more flexibility
Now, Instagram will move away from that sort of heavy
on the creative front. A 13-year-old boy who likes
involvement. An algorithm will take over those duties, and
videogames is not likely to have as finely tuned aesthetics
relevancy and creativity will be two key factors.
as a 34-year-old man who follows fashion designers
on Instagram, for example, so the creativity bar may
Executives identified several best practices for eMarketer.
be relative.
These apply to both brand ads and direct response.
But Instagram’s Squires was reluctant to give over too
PRACTICE FOR PAID ADVERTISING BY HONING YOUR
much of the control to marketers. With the ads rollout,
ORGANIC INSTAGRAM PRESENCE: “Know what types of
“advertisers will have the flexibility to create something
images your customers are already looking at and taking
that is very relevant for the individual—and that’s in line
and sharing, so that by the time you turn on advertising,
with the tone that has been set in the platform,” he said.
the creative piece will come more naturally,” said Matt
Collins, vice president of marketing at Ampush.
DON’T REUSE: Instagram’s distinctive square image FACEBOOK TARGETING IS A HUGE STEP
format is only one of many reasons marketers can’t
(and shouldn’t) try to recycle ads from other campaigns. FORWARD, BUT ALSO A RISK
Successful brands have developed unique assets Advertisers on Instagram will soon be able to target
specifically for Instagram. ads using many of the same capabilities that Facebook
offers. Given that the current targeting on Instagram is
Marketers shouldn’t say, “Hey, I just bought a space on very broad (only gender, age and geography), this is a big
Instagram, let me recycle a print ad, digitize it and put it step forward.
on Instagram,” said Keller of GMC. “As a marketer, it does
take a little bit more thought, and a lot more heavy lifting; One important new feature will be the ability to use
and it takes a lot more resources and time.” Custom Audiences, an ad product that has been a hit with
many Facebook advertisers. Custom Audiences allows
marketers to bring in their own information (such as an
email subscriber list) and target those people.
INSTAGRAM ADVERTISING: WHAT MARKETERS NEED TO KNOW ©2015 EMARKETER INC. ALL RIGHTS RESERVED 12
The connection to Facebook targeting is a primary reason This spring Mini launched a campaign on Instagram to
why many marketers are interested in Instagram. promote its Countryman compact SUV. The automaker
teamed up with skateboarder Tony Hawk and his family in
“It could be a really powerful one-two punch,” said Lee a series of ads designed to promote the Countryman as a
Nadler, marketing communications manager at Mini USA. family-friendly option.
“The ability to have essentially the same interface that Mini tracked which Instagram users were exposed to the
you have when you’re doing Facebook advertising, ads and followed up with ads that appeared when those
along with the same kind of data characteristics from a users were on Facebook. Those that interacted with a
targeting capability perspective, will make advertising Facebook ad were then retargeted with additional Mini
on Instagram a lot more effective,” said Jim Davis, vice advertising on Facebook.
president of consumer engagement at Ugg Australia, a
unit of Deckers Brands. “You can look at Instagram as an opportunity to start a
conversation and get somebody inspired quickly, and
But some executives expressed concern over the use then you can retarget them on Facebook,” said Nadler.
of Facebook information for targeting on Instagram. As “With Facebook, they can go deeper. You can show
described above, many people use the two services in a longer-form video, you can engage with them in a
different ways, and their activities may not match up. different way, you can get them to sign up for things.”
“If I were to ever see an Instagram ad based off my RECOGNIZE THAT TARGET AUDIENCES WILL BE SMALLER:
Facebook activity, I would be able to tell because my Facebook is so large that even very specific targeting can
behaviors are so different between the two platforms,” still yield a sizeable audience. But since Instagram is so
said Meyers of Code and Theory. “I think consumers much smaller, that won’t be the case there.
understand that banner ads follow you around the
internet. But Instagram is this pure place, and I don’t think “Facebook gives you so much specificity you can really
it’s ready for that type of targeting.” spend a lot of time crafting the right target audience,”
said Eli Perez, a social media analyst at AKQA. “It will
According to Squires, “there’s a combination of be interesting to see what sort of carryover that has to
signals that go into the targeting,” he said. “The demo Instagram from both a qualitative perspective and also
targeting—age, gender, geography—is very accurate a quantitative, and how big these audiences are going
because identity is very strong on Facebook. There are to be.”
signals on ‘likes’ and interests and psychographics that
come from the Facebook side. There are also signals that
you get from the Instagram side.”
MEASUREMENT IS IMPROVING BUT NOT
How should marketers approach targeting on Instagram?
Slowly, at least at first, until users get used to the idea.
FULLY DEVELOPED
Marketers generally agree that Instagram’s measurement
FACEBOOK DATA IS ONLY ONE PIECE OF THE MIX: “I think the capabilities need work. In a December 2014 Cowen
most valuable targeting is going to be less about what survey asking senior ad buyers in the US to identify
they’re doing on Facebook and more about what we the benefits of buying advertising on Instagram, only
know about that audience and what they’re passionate 6% cited return on investment (ROI) and just 4%
about or where they’re at in the product or purchase cycle cited measurement.
for a given brand,” said Lange of Starcom. “It’s definitely
less about retargeting specific behaviors on Facebook or
from another site.”
INSTAGRAM ADVERTISING: WHAT MARKETERS NEED TO KNOW ©2015 EMARKETER INC. ALL RIGHTS RESERVED 13
Benefits of Advertising on Instagram According to US So far, every brand advertiser that has used Instagram
Senior Ad Buyers, Dec 2014 has gotten a Nielsen Brand Effect study (which tracks
% of respondents brand metrics such as awareness, attitude, intent and
User base (in size) 70% preference in real time) as part of their ad package.
Mobile capabilities 64% Instagram has conducted studies for more than
Audience targeting capabilities 15% 475 campaigns.
ROI 6%
Competition 4%
As Instagram rolls out its action buttons, “there will
Measurement 4%
be additional measurement functionality around those
No potential issues 2%
specific actions, around conversion and purchase
Campaign set-up 0%
Other 33%
behavior,” Squires said.
Source: Cowen and Company, "Annual Ad Buyer Survey III: 2015 Outlook,"
Jan 12, 2015 Because Instagram will be able to tap into what Facebook
184483 www.eMarketer.com has already developed, that should quicken the pace at
“I think what we’ve struggled with on the paid side of which advertisers become comfortable—assuming the
Instagram is that it’s hard to really understand where metrics continue to be as positive as the brand-oriented
the value might come from,” said Davis of Ugg Australia. ones the initial advertisers have seen.
“We try to track some of the same kind of things that
everyone else does, but we’ve seen a really mixed bag on “We’ve seen strong results across the board against
all those measures.” brand lift as well as message recall metrics,” Starcom’s
Lange said. “But where I would really like to see more
That lack of visibility, combined with the high price of opportunities from Instagram is in facilitating multi-touch,
Instagram’s brand campaigns, has kept some advertisers multichannel attribution, whether that’s looking at online
on the sidelines during beta testing. KPIs or conversions, or in-store sales.”
INSTAGRAM ADVERTISING: WHAT MARKETERS NEED TO KNOW ©2015 EMARKETER INC. ALL RIGHTS RESERVED 14
Social Networks Used by Digital Buyers in Select However, once a user clicks through to the advertiser’s
Countries/Regions When Deciding Which Products to website, they may be able to navigate to additional
Purchase, Oct 2014 products and purchase them from there.
% of respondents
Asia- Brazil Mexico US Western
Pacific* Europe** APP INSTALL ADS MAY BE A BETTER FIT: eMarketer
Facebook 23% 65% 56% 20% 21% estimates that $3 billion will be spent on mobile app
Google+ 9% 35% 31% 8% 12% install advertising in the US this year, and Facebook is a
Instagram 6% 19% 9% 4% 4% leading recipient of that spending. App advertisers that
Twitter 5% 22% 17% 6% 6% have grown accustomed to using Facebook’s extensive
LinkedIn 3% 12% 7% 3% 3% targeting capabilities will appreciate being able to use the
Pinterest 3% - 9% 10% 3% same on Instagram.
Other 27% 14% 20% 1% 2%
Don't use any social 43% 16% 23% 65% 65% “The easier we can make it for our customers to access
networks (for
product purchases) our product, the better,” said Cara Friedman, social
Note: ages 18+ who made at least two digital purchases in a typical three- media marketing manager at ClassPass, which has been
month period; *includes China, Hong Kong, Japan, Singapore and South
Korea; **includes France, Germany, Italy, Netherlands, Spain and UK testing ads with an Install Now button to prompt users
Source: UPS, "Pulse of the Online Shopper: A Customer Experience Study" to download the company’s fitness class scheduling app.
conducted by comScore Inc., March 3, 2015
187203 www.eMarketer.com “Technically, right now you can install from Instagram if
you go to our profile and click on our link. The fewer clicks
Instagram’s partnership with image monetization
we can have to get people to do what they’re trying to
platform Curalate will continue. Curalate offers a concept
accomplish, the better.”
called Like2Buy to retailers looking to sell products
via Instagram.
INSTAGRAM ADVERTISING: WHAT MARKETERS NEED TO KNOW ©2015 EMARKETER INC. ALL RIGHTS RESERVED 15
EMARKETER INTERVIEWS Jim Davis
VP, Consumer Engagement
Ugg Australia
CW Leverages Instagram’s Autoplay Ads to Promote
Interview conducted on June 23, 2015
‘The Flash’
Caty Burgess Cara Friedman
VP, Media Strategies Social Media Marketing Manager
The CW Television Network ClassPass
Interview conducted on June 18, 2015
Interview conducted on June 24, 2015
of Instagram
Jessica Lauria
Rod Strother
Senior Director, Brand Communications
Director, Worldwide Digital and Social
Chobani
Lenovo
Interview conducted on June 23, 2015
Interview conducted on June 25, 2015
Kelly Meyers
Sven Alwerud
Senior Creative Strategist
CEO and Co-Founder
Code and Theory
Jelly Skateboards
Interview conducted on June 16, 2015
Interview conducted on June 19, 2015
Marshall Manson
Brian Austin
Managing Director, EAME, Social@Ogilvy
Creative Strategist
Ogilvy and Mather
Code and Theory
Interview conducted on April 14, 2015
Interview conducted on June 16, 2015
Lee Nadler
Allyson Campa
Marketing Communications Manager
VP, Marketing
Mini USA
Dot & Bo
Interview conducted on June 23, 2015
Interview conducted on June 25, 2015
Eli Perez
Matt Collins
Senior Analyst
VP, Marketing
AKQA
Ampush
Interview conducted on June 16, 2015
Interview conducted on June 11, 2015
INSTAGRAM ADVERTISING: WHAT MARKETERS NEED TO KNOW ©2015 EMARKETER INC. ALL RIGHTS RESERVED 16
Victor Pineiro Waggener Edstrom Asia-Pacific
VP, Social Media YouGov
Big Spaceship
EDITORIAL AND
Interview conducted on June 23, 2015
RELATED LINKS
Advertising Age
Canaccord Genuity
comScore, Inc.
Cowen and Company
GfK
GlobalWebIndex
JMP Securities
J.P. Morgan
L2 Think Tank
Mobile Marketing Data Lab
Office of Communications (Ofcom) – UK
Opinion Box
Pew Research Center
Raymond James
RBC Capital Markets
Reuters Institute for the Study of Journalism at the
University of Oxford
Salesforce Marketing Cloud
Shareablee
Strata
Trefis
University of Massachusetts Dartmouth Center for
Marketing Research
UPS
INSTAGRAM ADVERTISING: WHAT MARKETERS NEED TO KNOW ©2015 EMARKETER INC. ALL RIGHTS RESERVED 17
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