Instagram has officially launched its new advertising application program interface (API), allowing third parties to directly connect to the Instagram platform and trade advertising programmatically. Introducing an API platform is a major change from its previous approach, which heavily relied on advertisers directly purchasing adverts via an Instagram sales representative – a costly and time-intensive process that in effect limited these purchases to brands with a big ad spend.
Providing users direct API access to its advertising platform is a potential game changer. Advertisers can now use Instagram as an inventory source within their campaigns in a frictionless manner, making the decision to use a portion of their budgets for Instagram easy. An additional benefit is that advertisers can now bring the full weight of their technology stack to bear upon Instagram’s users, allowing for their suite of targeting abilities to be used to deliver relevant ads and for their impact to be accurately tracked and analysed. With it also uniquely being able to offer its parent company Facebook’s user profiling power (such as the popular Custom Audiences tool), Instagram looks to be set to become an advertising powerhouse – particularly with those looking for new channels to target difficult-to-engage millennials.
Instagram’s Golden Potential
However, US users started seeing adverts at the beginning of 2014 and the international roll-out was announced in June. In the same year, Instagram announced a strategic partnership with Omnicom, which could be worth in excess of $100m. Suddenly Instagram was a player in an extremely lucrative market.
Instagram has instantly opened even more doors with its recent launch of the direct advertising API. eMarketer predicts that Instagram’s ad revenues will reach $595m this year, exceed $1.2bn in 2016 and reach $2.4bn in 2017 – surpassing both Google and Twitter for mobile display advertising.
User Reaction
Social platforms are understandably nervous when making large-scale changes, such as introducing advertising to a previously ad-free environment. How will established users react? Will user growth slow?
For Instagram, the attitude of users so far seems to be positive on the whole and the adverts themselves seem unobtrusive. Given that adverts have been attracting thousands of ‘likes’ from users, it seems as if Instagram has got it right. Brands are overwhelmingly positive as to the success of their campaigns to date – Instagram advertising seemingly provides them with a direct channel to engage their supporters and brand champions without becoming an annoyance.
The platform is also providing users with a direct method for giving negative feedback on ads they view. Clicking ‘hide this’ on an advert provides a prompt to select whether it is the advert itself they do not wish to see or the brand’s account generally. It has also promised that user feedback received via these channels will be used to better refine advertising on the platform. Exactly how this refinement will occur remains to be seen, but it is likely to become increasingly important as the direct API allows a greater number of advertisers to deliver creatives to users without any form of filter being applied by Instagram.
King of mobile?
One particularly unique aspect of Instagram’s advertising offering is that it is mobile-only. Traditional ad platforms have struggled to adapt to the constraints presented by advertising in a mobile environment.
Instagram represents a new approach – an advertising platform designed from the ground up with mobile at the forefront. Desktop is not even a second-thought; it simply does not feature. This allows sharp focus to be maintained on mobile and to ensure that its focus is on (and its advertising R&D dollars are flowing solely into) its unique ecosystem which few other advertisers can offer – allowing Instagram to keep innovating to stay ahead of the curve.
As the next generations experience digital life increasingly through a mobile device rather than a traditional desktop, platforms such as Instagram become vital to advertisers as they look to engage these new consumers: an audience inaccessible through traditional channels.
With an already successful mobile-only advertising offering now being augmented with ease of access for advertisers, Instagram looks to have everything in place to become king of the mobile display world.
Alex Dixie is an associate at Olswang and a contributor to the adtech website ADTEKR, where this article was originally posted. Follow on Twitter @adtekr.
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