Instagram Ads: Pain or Profit?

posted by Haley on December 7, 2015

Instagram Ads: Pain or Profit?

posted by Haley on December 7, 2015

There has been a great deal of buzz surrounding the recent roll-out of Instagram advertising for both big and small businesses. Most of this buzz has been about the effectiveness and profitability of ads as well as the question of how annoying these ads will be. If you are searching for ways to improve engagement on social or attract new customers, Instagram looks to be the answer.

Instagram Ads are Worth the Extra Dollars

Instagram advertising is here and it’s easier than you expected. Ads can be created though Facebook Ads Manager, PowerEditor, or the Facebook Ads API. Your business doesn’t even need to have an Instagram account. Instagram will instead pull the name and profile image from your Facebook business page and use that for the advertisement. One thing to note if you choose this route is that in your Instagram ad, your name will appear grey and be un-clickable because there will be no profile to link to.

Instagram advertisement ice cream heart

Advertising is currently available for businesses in 30 countries. Due to this recent advertising roll out, it is estimated that in just a couple of years Instagram will reach annual revenues of $1 billion. They will round out 2015 with roughly $595 million in revenue.

The Need to Know Info

Facebook and instagram targeting, dartFacebook is giving Instagram advertising the upper hand right out of the gate. The extensive analytics already in place for Facebook advertising mean that Instagram advertising will provide better targeting capabilities. However, this also means a larger price tag for advertisers.

Facebook’s current cost per thousand impression (CPM) for local awareness ads is $2.50; while Instagram is averaging a CPM of $6.70 currently. Although this seems high there are benefits to using Instagram.

Users are two and a half times more likely to click on an ad on Instagram over any other platform. Therefore this increase in engagement is easily worth the extra money.

The Ads

The layout options for advertising on Instagram are a photo, video, or carousel ad (up to 4 images). There are also 9 call to action buttons available for advertisers to use including: shop now, download, book now, learn more, etc.
3 Instagram Advertisement types photo video carousel

Facebook’s advertising policies apply to Instagram advertisements therefore, be careful about text on images, if it covers more than 20% of the photo, your ad will be rejected. Another feature thanks to Facebook is custom audience, where an imported list of emails or customer names will allow you to target users your brand already has a connection with. One of the best but most controversial features to be rolled out for Instagram ads was the 30 second video for businesses while user videos can only be 15 seconds.

The Flip Side

Instagram users started to question the quantity of advertising that would eventually be displayed on their feed when it was rolled out to a small number of large brands. This hesitancy by users was only heightened recently when the extended video option was released to businesses. However, there has not been a great deal of backlash in recent weeks with the full rollout of Instagram advertising. This may be due to the fact that it is quite easy to turn off an ad by simply clicking “sponsored” on a post and then choosing to hide the ad.

Hiding sponsored ads on instagram

This will hide this add and change your preferences towards this company or type of advertisement depending on whether you select the photo or the account as the issue. Instagram uses Facebook and other apps to decide which advertisements to display to each person, but this can be easily turned off through phone and computer settings. By changing these settings, only your actions on Instagram will affect which ads you are shown.

Answer = Profit

Overall there has not been enough of a fuss by Instagram users to show that the benefits are being outweighed by the negatives of opening up advertising to all businesses. Once Instagram advertising is accepted by a larger number of companies however, it may be a different story. But for now, every business should be willing to spend a few extra dollars to capitalize on this exponentially powerful ad platform.

 

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