Preparing for Instagram as an advertising platform

StarbucksIGadEver since Facebook purchased Instagram, Facebook Co-Founder and CEO Mark Zuckerberg hinted that advertising will come to the photo sharing service.

During Wednesday’s second quarter earnings call, Zuckerberg pretty much confirmed that someday, Instagram will have ads:

(Instagram Co-Founder Kevin Systrom) has always been clear that we’re building Instagram to be a business, and that’s – we expect that over time, we’re going to generate a lot of profit from it and probably through advertising. Now, that all said, right now, it’s just growing so quickly. I mean, the number that we’ve just said was 130 million monthly actives, video product is growing really quickly. There are so many directions to expand this in, that we think that the right focus for now, is to continue just focusing on increasing the footprint of Instagram and when the right time comes and we’ll think about doing advertising as well, and I think that’s going to be a really big opportunity.

Advertising could be huge on Instagram, as brands are increasingly flocking to it. According to Simply Measured, 67 of the Interbrand 100 companies are on the site already, engaging with users and sharing highly visual content. Among these 67 brands on Instagram, there’s an audience of 7 million users, and growing.

Several brands — such as MTV and Mercedes-Benz — have seen loads of engagement through Instagram, showing that people do comment and like Instagram photos from companies. Furthermore, Starbucks and Nike have not been afraid to utilize Instagram video for success.

Facebook is learning more about the advertising process and catering to companies who want to be ahead of the curve and create memorable and engaging ad campaigns. With Instagram’s video and photo features, brands are already doing some great things. For instance, Lululemon was one of the first major brands to use video on Instagram to tell a creative and remarkable story. After the Miami Heat won the NBA Finals, Nike posted an Instagram video of NBA legend Bill Russell leaving a message for Lebron James.

Brands are already creatively using Instagram to promote themselves, and it’s easy to see that a day will come when Nike would be able to put a photo of Lebron’s newest sneakers in the Instagram feeds of those who are following James, the NBA, or any other basketball or sports-related account. Instagram could (and likely would) tap into Facebook data, for users who have connected their accounts, and allow brands like Starbucks to put a photo in the feed of someone who recently checked in near a café on Facebook.

Much like Facebook advertising, it would start with larger brands, then smaller companies would get on board. Facebook has become much more responsive to brands’ needs and could run advertising on Instagram with the knowledge that it has gained from its successes and failures on the main social network.

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