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Increased Competition for Instagram Ads

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Over the last few years, Instagram has become one of the most used social media networks, eventually being bought out by Facebook in 2012. This was a big year for Facebook as they also launched their ads feature to businesses. It was only a matter of time until it was incorporated into Instagram as well. In a recent article for @TechCrunch, Steve Feiner (@SteveFeiner1) tells us that Instagram will organize your news feed based on a new algorithm that optimizes content based off your interests, the relationship with the person posting, and the timeliness of the post.

“On average, people miss about 70% of the posts in their Instagram feed. What this is about is making sure that the 30% you see is the best 30% possible.”

– Kevin Systrom (@kevin), co-founder and CEO of Instagram

Facebook

One of the largest companies just keeps get larger. With their revenue increasing quarter by quarter, they have been maintaining a growth rate of over 40%. That is huge no matter what business you are in. As for Instagram, they hit an astonishing $600m in revenue for 2015 and are predicted to grow to 149%, which is equivalent to almost 600 million new users. With both platforms growing rapidly, there is no surprise that integrating ads has boosted revenue.

Brand competition

With Instagram’s attempt to control ad content, it will be much tougher to market your company without a big penny being attached. The changes come with essentially mirroring Facebook’s news feed as it is optimized per user. This new control favors large brands who have the budget to pay for ads and essentially bumps the smaller businesses out of the way. Soon enough, Instagram will be more about the paid advertisements than the beauty of the app, photographs and editing.

Money has been the driving factor for many businesses and will most likely continue. While Facebook ads have proven to bring in lots of revenue for companies, there is no wonder why Instagram is doing the same thing. Get ready to pay up big for your spot in the advertising pool!

Read the source here

Topics: Marketplace, Social Media

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