The multibillion-dollor goldmine called; Instagram


As some of you might have noticed, Instagram recently started adding Adds in your “timeline”. The cause of that is the change that barely anyone noticed. It officially switched on API, or application programming interface, for ads.

Instagram-ads-1024x812

For marketers, Instagram has long been a coveted target. The network has 300 million users, and has won the battle of Twitter and LinkedIn. In comparison with Facebook or Twitter, Instagrams users are considerably younger. 44% percent of the people on Instagram are 18-24 years old, opening a brand new audience for marketers.

The network began testing Ads on the platform in late 2013, early 2014. The results were encouraging; users reported a 2.8 times higher recall compared to traditional online ads. Companies had to pay a minimum of $200,000 to purchase the ads, which was a major turn off for most companies. Most companies didn’t have the resources to make Instagram part of their campaign.

With the new API offering, everything changed. Everyone and anywhere can now purchase ads. This means that marketers can now automate the ad-buying process and compare the results easy. Althought the changes are little, experts call the change “one of the most anticipated moments in the evolution of advertising”

Butt will opening the floodgates to ads change it’s users behaviour? Will Instagram’s dedicated users, who now post 70 million images daily, go to sexier apps like SnapChat? Instagram’s solution is taking the process step by step, hoping to avoid a major backlash in its users. The native format looks a lot like normal posts, and receives thousands of likes from enthusiastic users. But where is the redline, that Instagram can’t cross?

Paid ads are not the only option, creating more followers or creating a community through Instagram are ways to reach the public eye. But with the recent API change, Instagram is open for business and a goldmine for many marketers. Keeping in mind that twee quarters of Facebook’s revenue now comes from mobile ads and de opportunity to reach the younger public. The only problem is finding a way to keep both users and advertisers happy. But once the solution is found, Instagram will be a multibillion-dollar ad riddle in the years ahead.

http://recode.net/2015/08/19/why-an-instagram-tweak-spells-the-beginning-of-a-multibillion-dollar-industry/

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