Q. What do this mean for you?
A. Nothing yet. So far only 5 advertisers have been included in the initial rollout of sponsored Instagram posts. Hudson’s Bay Co., Target Canada, Sport Chek, Air Canada, and Travel Alberta will have their posts seen in the feeds of Instagram users who may not otherwise follow the brands accounts. Posts will look exactly like native Instagram posts with the exception of the “sponsored” tag in the upper right hand corner as seen in the images here.
Instagram is reportedly already in talks with the 2nd batch of Canadian brands who will run ads on the platform, but there is not yet word on when a full rollout for all brands will be available.
For now we will keep an eye on the response and reported success or failure of the initial Instagram ad campaigns in Canada.
Original Post, June 16, 2014: Instagram has become the “next big thing” in social media marketing for many brands, and soon Canadian brands will have the opportunity to pay for ad placement on the photo and video sharing app the same way they do on Facebook.
Last year Facebook (Instagram’s parent company) rolled out ads in the feeds of users in the United States and have seen enough success to announce that Canada, Britain and Australia will be following suit later this year with Q3 as a target date for launch.
At first only large brands will be able to access the new ad function and the roll out will be slow and calculated to avoid pissing off users who have become accustomed to seeing only their friends posts and branded content from brands that they have followed on their own accord. It’s a safe play by Instagram and one that isn’t likely to backfire on them. The truth is that many social media users complain about ads on all social networks, but rarely quit using a service because of them. They understand that seeing ads is a fair trade-off for having a service they love to use available to them for free.
The targeting system used by Instagram sounds very similar to the one used by Facebook. Ads will appear in users’ feeds based on content that they like, accounts they follow, and information pulled from their Facebook profiles. It’s a system that does as much as possible to provide relevant ads to users and provide qualified impressions for brands. And we know it’s working for Facebook as their revenue continues to grow with ads making up 90% of the financial pie.
But before your brand jumps up and asks Instagram if you can be one of the being cautious. In the last annual report Zuckerberg’s team cautioned: “we cannot assure you that these ads will generate meaningful revenue for our business”
It does not mean that there isn’t still an upside to impressions, building brand community and creating buzz with awesome visual content. But be aware that ROI may not come in the traditional form of sales directly resulting from the ads.
By the end of 2014 we should have some sense of whether or not Canadian Instagram users will prove to be receptive to ads in their stream, and if they are going to be worth the investment moving forward.
Until then, we don’t recommend putting money aside for Instagram that you could be using somewhere else.