Instagram Advertising in 2016:

#TheStruggleisReal

 

Categories: Social Media

30/12/2015

By the end of the year, over 25 billion dollars will be spent on social network advertising worldwide. With advertisers spending 600 billion dollars on Instagram advertising during the brief amount of time it has been open for business. Instagram ad revenues are predicted to dramatically increase year-over-year, and will pull in more revenue than other leading mobile ad platforms by 2017.

So why are marketers and advertisers spending more of their ad budgets on Instagram?

Instagram User Growth

Recently, Instagram clocked 400 million users. If this isn’t reason enough reason to increase ad spend on this social network, we don’t know what is. Though, brands are more likely shifting their ad strategy to Instagram because their target audience is flocking to the app. According to Pew Research Center, 56% of online adults ages 18-29 use Instagram. These statistics show an upward growth in the amount of ad revenue because the number of consumers you will be able to reach is rapidly increasing.

Mobile Growth

Today, you can’t walk down the street and exchange a smile, nod or wave easily. This is because the majority of people are staring down at the mobile devices while they go about their daily lives. And here’s proof:

  • 87% of millennials always have their smartphone at their side at all times (CMO Council)

  • 78% of millennials spend over 2 hours per day using their smartphone (CMO Council)

  • 91% of millennials purchase on mobile monthly (Social Lens Research)

  • 35% of millennials would like to purchase more on mobile but it’s too hard to do so (Social Lens Research)

  • Millennials in the U.S. spend an average of 7 hours a month on Instagram (Statista)

As you can see, mobile usage is a way of life for generations born into the technology era. Marketers and advertisers will need to adapt to the mobile shift so they can reach their audience.

Increased Ad Blocking

There is numerous positives to consumers becoming more socially savvy. However, there is one major hurdle that marketers and advertisers need to overcome – ad blocking. Consumers are tired of being bombarded by ads almost everywhere they go, and they are taking action.

Ad blocking usage in the United States grew by over 48% during 2015. So, how is ad blocking affecting brands? Adobe estimated that this year alone, 21.8 billion dollars of revenue will be lost due to ad blocking globally. Marketers and advertisers can’t afford to leave this much money on the table, so they are turning to other digital platforms such as Instagram to spread their message.

Achieving Results with Instagram Ads

Monetizing posts is a very realistic possibility with Instagram ads. Brands and advertisers that have been able to advertise on Instagram are starting to see the positive results from their efforts. Now that they have proven Instagram ads drive revenue they and focusing on structuring strategies to influence more revenue with each campaign. Therefore, advertising revenue generated by Instagram will reach a whopping $1.48 billion in 2016 (eMarketer) as marketers look to spend more to get a greater return.

The more data and tracking you have in place, the better you’ll be able to produce results. The key to advertising on Instagram is to stick to the fundamental principles of the social media network. Marketers and advertisers should create compelling ads that are not overly promotional, and blend in with the user generated content (UGC) consumers are used to seeing on Instagram. Consistent, high quality, authentic images are effectively increasing brand awareness and revenue.

The Rise of User Generated Content (UGC) and Social Influencer Marketing

The growth of influencer marketing has given brands and advertisers access to UGC that can be repurposed in their advertisements. The benefits of using UGC in your Instagram ads are worth the time and effort to identify the most engaging content from the best social influencers.

This #CastMeMarc campaign by Marc by Marc Jacobs was great because it really understood how to get strong audience involvement. The key here was that the contest offered a reward that was strong enough to elicit real participation.

The competition was for the chance to be a Marc by Marc Jacobs model and asked their Instagram followers to submit selfies with the hashtag #CastMeMarc in order to participate in a digital casting call. The results?

The hashtag #CastMeMarc was Instagrammed over 12,000 times in 24 hours – that’s about 8 selfies a minute.

Conclusion

It’s without a doubt that Instagram is going to play a major role in digital advertising for years to come. Brands already advertising on Instagram have experienced an increase in brand awareness and revenue. Brands and advertisers should prepare their advertising budget for 2016 to include Instagram.

Sources: adweek.com, blog.hubspot.com, salesforce.com and mobileadvertisingwatch.com

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