By the end of the year, more than $25 billion will have been spent on social network advertising across the globe. Advertisers have already invested $600 billion on Instagram advertising during its short history. Instagram ad revenues are predicted to dramatically increase year-over-year, and will pull in more revenue than other leading mobile ad platforms by 2017. So why are marketers and advertisers spending more of their ad budgets on Instagram?
Instagram now has 400 million users, with half of them using the site daily. The amount of active users alone is one reason to increase ad spend on this social network. However, brands are most likely shifting their ad strategy to Instagram because their target audience is flocking to the app. According to Pew Research Center, 55 percent of online adults ages 18 to 29 use Instagram. These statistics show an upward growth in the amount of ad revenue because the number of consumers you will be able to reach is rapidly increasing.
Today, you can’t walk down the street and exchange a smile, nod, or wave easily. Most people are staring down at mobile devices while they go about their daily lives. Last year, close to half a billion mobile devices or mobile connections were activated worldwide. Mobile devices are not just a business necessity or luxury item, it is a way of life. Forty-six percent of smartphone owners say they couldn’t live without their device. To understand the increase of mobile usage we need to take a closer look at millennials. By studying their mobile behaviors you can get a glimpse into what the future holds.
- 87 percent of millennials always have their smartphone at their side at all times (CMO Council)
- 78 percent of millennials spend over 2 hours per day using their smartphone (CMO Council)
- 91 percent of millennials purchase on mobile monthly (Social Lens Research)
- 35 percent of millennials would like to purchase more on mobile but it’s too hard to do so (Social Lens Research)
- Millennials in the U.S. spend an average of 7 hours a month on Instagram (Statista)
Clearly, mobile usage is a way of life for generations born into the technology era. Marketers and advertisers must adapt to the mobile shift so they can reach their audience.
Increased Ad Blocking
There are numerous positives to consumers becoming more socially savvy. However, there is one major hurdle that marketers and advertisers need to overcome – ad blocking. Consumers are tired of being bombarded by ads almost everywhere they go, and they are taking action. Ad blocking usage in the United States grew by over 48 percent during 2015. So, how is ad blocking affecting brands? Adobe estimated that this year alone, $21.8 billion of revenue will be lost due to ad blocking globally. Marketers and advertisers can’t afford to leave this much money on the table, so they are turning to other digital platforms, such as Instagram, to spread their message.
Achieving Results Through Instagram Ads
Monetizing posts is a realistic possibility with Instagram ads. Brands and advertisers that have been able to advertise on Instagram are starting to see the positive results from their efforts. Now that they have proven Instagram ads drive revenue they and focusing on structuring strategies to influence more revenue with each campaign. Therefore, advertising revenue generated by Instagram will reach a whopping $1.48 billion in 2016, according to eMarketer, as marketers look to spend more to get a greater return. The more data and tracking you have in place, the better you’ll be able to produce results. The key to advertising on Instagram is to stick to the fundamental principles of the social media network. Marketers and advertisers should create compelling ads that are not overly promotional, and blend in with the user-generated content (UGC) consumers are used to seeing on Instagram. Consistent, high quality, authentic images are effectively increasing brand awareness and revenue.
The Rise of User-Generated Content & Influencer Marketing
The growth of influencer marketing has given brands and advertisers access to user-generated content (UGC) that can be repurposed in their advertisements. The benefits of using UGC in your Instagram ads are worth the time and effort to identify the most engaging content from the best social influencers. One of the most important reasons brands should focus on collecting authentic UGC is because it is more trusted than brand content. UGC influences consumers to buy because they receive validation from other customers that the product provides value. When marketers reveal the authentic side of their brand it builds brand trust and loyalty with consumers. Getting permission from social influencers to use their UGC is a budget-friendly way to get creative for your ads. The great thing about UGC is that there is fresh new content being created by thousands of people daily.