By Krista Wiltbank.
Instagram is hot, as you may have heard, but not just among the millennials you might picture. The photo- and video-sharing social channel has more than 600 million monthly active users, and more than 200 million people use it every day. As its features become more advanced, these numbers will only continue to grow.
With its explosive growth, brands are naturally turning to Instagram as an advertising platform. In fact, Facebook recently cited Instagram as one of the most important parts of its current advertising strategy. Last year, Instagram announced new business tools, including simplified analytics and profiles friendly to small and medium-sized businesses, to support its rapidly expanding base of advertisers.
So why haven't small businesses jumped on the Instagram opportunity? According to Manta's poll last October of nearly 1,500 small and medium-sized business executives, only 20% actually pay to promote posts or place ads on Instagram. The remaining 80% should feel a sharp sense of FOMO (Fear Of Missing Out) -- because they are.
Small and medium-sized businesses, in particular, risk being left in the dust by savvier competitors.
No matter how you slice it, we're living in a visual age in which the average person is more likely to watch a video, or look at a picture, than read a written passage. Research finds that 65% of the population are visual learners. This is why web pages with visual content receive 94% more views than those without. Marketers know this and have adapted accordingly, with two-thirds saying visual assets are critical to communicating their brand.
For small and medium businesses looking to engage customers and keep them apprised of products and services, Instagram's scale and capability for sharing the visual information that consumers crave is a huge asset. The numbers prove it. Rich media -- in the form of videos and images -- increase conversion rates by 64%.
Instagram isn't just an ad platform for brand campaigns. Instead, it has proven itself a useful way to drive performance and generate immediate sales. According to Instagram, 60% of its users familiarize themselves with products and services on the platform. Then, 75% take direct action after being inspired by a branded post. (Instagram only launched direct response formats in 2015.) In November 2016, Instagram introduced shopping tags in posts, not ads, for select retailers, with the program expanding in March 2017.
By using the network's expanding and varied direct-response formats, small and medium businesses can provide information about a product or service, then give the user a call-to-action button where they can purchase, sign up or download. Businesses want this form of advertising when they spend on social platforms, where investments are growing and need to be justified. And Instagram is seeing real success here. Ad firm Nanigans found that 54% of its clients bought Instagram's direct response ads last year, up from just 31% in 2015.
According to Ooyala, 51% of all video plays occur on mobile devices, representing a 15% increase from 2015, and a giant 203% jump from 2014. Another study by AOL finds that 57% of consumers globally watch videos on a mobile device every day. Ad spend follows user behavior. Of money that's shifting from TV advertising to online video, 63% is going to mobile video, according to the same study.
Instagram is on top of the mobile video explosion. To keep up and provide advertisers with more video options, it has dramatically expanded video capabilities over the past couple of years. First came longer video formats for advertisers (from 15 seconds to 1 minute). Most recently, Instagram copied Snapchat's functionality with "Stories." And the results have been impressive. Instagram Story links, according to recent data, get 15% to 25% "swipe-through" rates. Small and medium businesses need to take advantage of the demand for mobile video, and Instagram is a great way to do it.
While Instagram advertising among small and medium businesses is relatively low, adoption will climb as the platform's capabilities grow more sophisticated and the value of those features become known. Facebook is investing in the service, providing a rich environment for smaller businesses -- now, they need to take advantage of the opportunity.
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A. Brent Lovell