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The business of Instagram

By / / In Insight /
Jens Nielsen says marketers should be aware of new social media channels such as Instagram and Snapchat that are now challenging the space that has been dominated by Facebook and Twitter.
Instagram article

Social media has changed the way society communicates by altering the rules of how people interact with each other and with brands. There are now 2.3 billion active social media users across the world, making it a key target for businesses that are looking to engage with new and existing customers. While Facebook and Twitter may have led this transformation, these social media channels are now being challenged by new players like Instagram and Snapchat, which have been born out of the app economy.

Social media offers businesses the opportunity to increase their engagement with specific segments of customers from different demographics; social platforms are aware of this potential and are therefore continuously creating new features that are designed to help brands realise the commercial benefit of a particular channel, without imposing on consumers’ browsing habits and preferences through pushy advertising.

Instagram is a great example of this. The photo sharing app recently reached a landmark number of users – half a billion to be precise – with 300 million logging in on a daily basis. Many users first joined Instagram to avoid the advertising on Facebook or Twitter and, so far, the app has managed to avoid any negative backlash from users despite the increase in businesses using the site.

In fact, according to a report from eMarketer, 71% of US companies will use Instagram for marketing purposes by 2017, which goes some way towards suggesting why Instagram is investing in its business offering and adding contact buttons, dynamic ads and video, including Instagram Stories, to its offering.

Making the most of image-based apps such as Instagram

Businesses that want to make the most of Instagram first need to understand the value the social platform can offer. Instagram is a great way to reach a younger audience, for example, and should therefore form part of any strategy that aims to engage with smartphone users in this demographic. The simplest step for any brand wanting to reach this audience is to have its own page where images that are relevant to its customers can be posted. For larger brands, endorsed content, where celebrities can post images of themselves promoting a specific product or service, can also be hugely beneficial.

It will come as no surprise that retail is one industry in which brands have had great success with this approach, as it’s much easier to promote a product on Instagram rather than a service.Instagram article

Luxury fashion brands are now using the app to allow fans a much coveted first glance at collections. Burberry, for example, gives its 7.5 million followers a ‘backstage pass’ to a world normally only seen by the world’s fashion elite. The newly introduced Instagram Stories also helps, as this tool provides a unique snapshot into the brand and all that it stands for. In the run up to fashion shows or fashion shoots, the brand shares behind the scenes photos to create drama and intrigue. The information only lasts 24 hours so it creates more of an informal and personal connection between the brand and the consumer.

Asos is another business that has harnessed the power of the photo-sharing site. Like most retailers using the platform, Asos posts pictures of its products and models on location shoots, but crucially the brand also understands that its users want something more. As such, it uses the site to offer styling tips and outfit ideas to showcase the brand’s understanding of its fashion savvy audience. The online giant has also created its own hashtag so users can promote their own styles in the hope of being included on the homepage. As a result, the British-based brand now has 5 million followers across multiple countries.Instagram article

The ever-changing landscape of social media such as Instagram

While Instagram is continuing to invest in new commercial offerings for businesses, it still has a long way to go to become a dominant social media platform. Its parent company, Facebook, is still very much the largest end-to-end channel for brands looking to monetise social media. As well as its ecommerce tools, the social giant has recently introduced the Chatbot capability, which allows businesses to deliver automated customer support to followers on request.

However, with consumer behaviour constantly changing, there is an open goal for these platforms to keep innovating and responding to consumer demands. Brands would do well to keep on top of these developments and adopt those tools and services which best suit the preferences of their target audience.

In order to be successful on social media, brands need to ensure they are not simply jumping on the bandwagon and implementing all the new features available to them. This tactic risks brands alienating themselves from their target audience. Instead, they should take the time to consider which features and platforms are most relevant to their brand and audience.

Author: Jens Nielsen
Head of UK and Nordic Operations and Group Management. at Netbooster |

NetBooster is a major independent European agency in digital performance marketing.

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