Instagram Ads: Too much?

There is no denying that I am obsessed with Instagram. I check the app as often as I drink water, which is a lot. As a wannabe photographer, it is a source of inspiration: I love looking at perfectly curated lives of people, things and places. I ignore the harsh reality that perfection is almost always nothing more than perception. In fact, Instagram is the only social app that has survived the purge of social media on my iPhone; Facebook, Snapchat and Twitter are all gone. (I use Facebook and Twitter mostly from my iPad Pro, which is my computer of choice these days and a replacement for my laptop.)

Over the past few days, though, I have been contemplating if it is time to get Instagram off my home screen as well. Why? Because it has been infesting my feed with too many ads — and not just any ads but terrible ads. Video ads. Ads that make absolutely no sense to me. Ads that have less relevance to my feed and me than dumb follow-me-everywhere banners on the web.

All of this comes from a company with more data about what I like, who I like and even details about the brands I follow and like than any other company out there. A service whose parent, Facebook, has more social and personal data than the NSA. Yet it can’t figure out the right ads for my Instagram feed.

And if that wasn’t enough, there is a plague of Sponsorgrams — individual posts where the advertiser has paid money directly to Instagrammer. As I wrote earlier, “On a social network where I proactively follow people for their creativity, there is an expectation of authenticity and every time there is a noticeable diversion, I feel a sense of disappointment.”

Instagram is starting to feel less authentic and instead more like a giant marketing platform, where the very atom of a social network — a person — is the last thing to factor into experience and other decisions. The latest onslaught of ads is a far cry from the seamless and high-quality native-advertising experience promised by co-founder Kevin Systrom when the company launched its initial advertising experiments. He even went as far as saying that he was vetting ads personally. Well, it doesn’t seem so, and longtime users of the service are noticing.

“Sunday morning prediction: Instagram will eventually kill itself due to sponsored posts (aka ‘Instagram Adverts’),” tweeted Dan Rubin, a London-based photographer and one of the earliest champions of the service. The result? The experience of the service is being slowly defrayed.

I thought maybe it was just me and because I use the service so much, I was seeing advertisements more often. So I asked folks on Twitter if Instagram is showing too many ads, and 68 percent of the 704 respondents said yes. When I asked if the ad quality has gone down drastically, 68 percent of the 412 votes said yes. Now, I know these polls aren’t very scientific and come full of cognitive biases, but they give a directional idea of what people think about Instagram ads. And the chances are that things are going to get worse.

Why? A study by Brand Networks, an online agency that works with Instagram, pointed out that during the second half of 2015 it served up 1.6 billion impressions and the average cost was between $5 and $6 per 1,000 impressions. Not great, but not bad either, though in order for Instagram to have a meaningful impact on Facebook’s revenues, it would need to do many billions of impressions to even get to a billion dollars. Given the lack of advertising in overseas markets, I suspect it will be U.S.-based Instagram users who bear the brunt of this ad surge.

Instagram will have 89.4 million U.S. users this year, or 27.6 percent of the population, according to eMarketer. That puts it ahead of Twitter (with 56.8 million) and behind its parent, Facebook (with 162.9 million U.S. internet users).


Some Wall Street analysts think Instagram will account for between $1 and $2 billion in revenues in 2016, while research firm eMarketer estimates that Instagram will account for about $2.8 billion in business by 2017. Instagram has introduced “Download Now,” “Shop Now” and other such action-oriented advertising formats, but it is still not clear whether the advertisers are seeing any real results. The quality of ads doesn’t inspire much confidence.

204205.gifVideo ads are hot everywhere, and apparently everyone wants to put them on their platform. Of course Instagram is going to participate in the video-ad madness. It just announced 60-second video ads. And while these will create a financial bonanza for a little while, I wonder how they will impact growth and engagement overall.

Locowise, a social media analytics company, pointed out that during 2015, “the follower growth on Instagram has declined 88.21%. From the high of 1.95% in April to the low of 0.23% in December,” while the engagement rate declined from “2.8% engagement high in April to the 1.08% engagement low in December.” To be fair, Instagram is doing way better that its rivals. For example, in Dec. 2015, on Instagram “an average post engaged 1.08% of the total followers,” Locowise noted. On Twitter, the average post engagement was 0.1 percent of all followers, and on Facebook 0.37 percent of page Likes engaged with a post.

195317.gifInstagram hit 400 million accounts in Sept. 2015 and will hit half a billion accounts later this summer. I wonder how much of that is coming from what is essentially scraping the bottom of the barrel. I am seeing more and more dodgy accounts, more spam, and more and more content that borders on being spurious.

I am not against advertising on any medium, including Instagram. I know it has to make money, much like Facebook, Snapchat and Twitter need to make money. These companies aren’t nonprofits. I get it. But what I deplore is terrible advertising that distracts from the overall experience. Great ads are actually great fun. I mean, the best parts of the Super Bowl are the ads and talking about them on Twitter and Facebook. But bad ads are just bad. They distract and they disappoint. And a lot of advertising on the internet is dumb and boring and punishes us for using services.

This is history repeating itself. Facebook was pretty gung ho about social ads but had to take a step back, because the advertising establishment didn’t want to work on new advertising concepts. Instead, it wanted a reworked version of banner advertising with better targeting based on user information. Banners have made room for video advertising because they offer higher CPMs — which is good for Facebook’s bottom line and for agencies, which can keep getting their cut.

The Instagram ad experiment is going through the same loop, thanks to a fossilized and unimaginative advertising establishment. What’s happening to Instagram is part of the cyclical eventuality for every social platform: It ends up becoming nothing more than a platform for advertisements and mass marketing. If anything, the Locowise engagement data shows that Instagram has a lot more room to cram adverts into our photo streams. And it will.

Instagram, as a company has a different set of priorities — priorities where their end customer now is advertising/marketing community and the advertisers. You don’t have to look too far to see who they are emphasize in their product decisions. Take for instance, their API which was pretty useful is now reduced to doing three really simple things – printing off Instagram, marketing related fictions and allow you to use your Instagram profile photo as your profile photo elsewhere on the Internet. They recently introduced switching between multiple accounts – personal and brand accounts — another example of the shifting center of gravity away from the commoner. Video views – again developed for marketers and not regular users.

If you were paying attention, then you could see it coming by a mile. Hootsuite CEO Ryan Holmes in a blog post pointed to the introduction of a advertising API as a big shift for the company and its future. “If the network can find a way to keep both users and advertisers happy, it may well be on its way to solving a multibillion-dollar ad riddle in the years ahead,” Holmes wrote. These set of decisions are going to keep them extracting dollars for a long time from advertisers, especially the brand dollars. For now they are too big to fail, but give it four years, and the whole ecosystem starts to decay.

If I sound disappointed, it is because back in 2013, when Instagram first experimented with ads, I was excited about the possibility that the company could catalyze a new age of mobile-oriented brand advertising. I hoped it would usher in a new era of creativity. And I wrote as much in my essay “Instagram ads and the future of brand advertising.” Two years and three months into the future, Instagram doesn’t seem to be anywhere close to be delivering on that idea.

Instead what we have is a division of Facebook that is finally being told to do what it was always meant to do: bolster Facebook’s bottom line.

A letter from Om

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