Are there long-term downsides to Creator accounts, Checkout, and branded content ads? What are the alternative approaches and platforms?
Instagram is the current powerhouse platform for B2C influencer marketers. The image-led platform boasts a billion monthly active users.There are 500 million daily active Stories users. Sixty per cent of users seek out and discover new products on Instagram.
Small wonder then that brand collaborations have grown by 44% in the past year. Fashion, style and beauty verticals taking the lead in branded tie-ins.
In the UK more than one-in-three (34%) of all brand-sponsored content on the platform falls within the fashion and style vertical according to a report last year by CampaignDeus. A further one-in-five (21%) brand-sponsored posts are devoted to the beauty vertical. This means that over half (55%) of all brand-sponsored posts from UK-based accounts on Instagram come from fashion and style or beauty verticals.
Kantar recently ranked Instagram the fastest rising company in the top 100 brands. The platform climbed 47 places after a 95% increase in brand value according to Marketing Week.
Branded Content ads
Instagram is on a charm offensive with brands. This month it rolled out Branded Content Ads. This new feature lets advertisers promote influencers’ Instagram posts through the brand’s company Instagram handle just like they would any other advertisement.
New eCommerce feature Checkout in beta mode enables Instagram users to buy the products they like straight from the app.
When you tap to view a product from certain, selected brands’ shopping posts, you’ll see a “Checkout on Instagram” button on the product page. Tap it to select from various options such as size or colour, then you’ll proceed to payment without leaving Instagram. You’ll only need to enter your name, email, billing information and shipping address the first time you check out.
Once your first order is complete, your information will be securely saved for convenience the next time you shop. You’ll also receive notifications about shipment and delivery right inside Instagram, so you can keep track of your purchase.
Instagram has embarked on a charm offensive with Creators, too, with the roll out of creator accounts. These offer influencers more in-depth analytics over their follower counts plus the ability to filter direct messages.
The account profile will offer:
- growth insights such as data around audience follows and unfollows;
- direct messaging tools enabling users to filter notes from brand partners and friends;
- flexible labels that allow users to designate how they want to be contacted.
Influencers will have access to data around when their followers are online, growth insights, and new discovery data.
Instagram is also trialling the combination of Checkout feature with Creator profiles, too. Last month the app started enabling people to shop inspiring looks from the creators they love from the creator’s profile rather than from a brand page, again, without leaving Instagram.
The trial is limited to less than a hundred influencers at the moment. Crucially businesses tagged must be part of the checkout beta in order for creators to tag their products.
Everything going swimmingly. A billion monthly users suggests that customers are happy. Checkout and branded content ads are designed to keep brand happy. Creator profiles and influencer access to Checkout are features designed to keep creators happy too.
As growth flattens at Facebook Zuckerberg has been forced to look elsewhere for advertising revenue to prop up the business. Eyes are now focused firmly on Instagram.
In the quarter to September 2018 the photo sharing app generated an estimated $2 billion (around 15% of Facebook’s $13 billion) in ad revenue, according to estimates from Andy Hargreaves, a research analyst with KeyBanc Capital Markets.
Hargreaves expects Instagram to grow to about 30% of Facebook’s ad revenue in two years, as well as nearly 70% of the company’s new revenue by 2020 — driving the majority of Facebook’s growth. According to independent tech news and review site, recode.
Throttling organic reach
Instagram creator accounts and branded content ads appear, on the surface, to be putting its community first but it is surely more about cash than community. The next step in the platform’s long-term aim will be to kill off organic reach. Just as Instagram’s parent, Facebook, did with brand pages.
Instagram’s first move to kill organic reach arrived in mid 2017 with the paid partnership tag. The tool purportedly helps creators disclose when a post is sponsored and also allow businesses to gather insights about how their sponsored content campaigns performed.
For most Instagram creators, the reality of using the paid partnership tag leads to inferior engagement rates. There is a significant negative variance when using any admarker such as #ad or #spon on paid-for content versus organic content. The variance widens depending on the admarker used.
The most popular admarker on Instagram is #ad with over 60% of marked paid-for posts containing this hashtag.The #ad admark also has the lowest negative impact on engagement rate.
Instagram’s Paid Partnership fares the worse. Creators who use this tag with brand collaboration work see their engagement rates plummet by a third (32%) on average. Further, average engagement rates on brand sponsored posts decline as account sizes grow.
A recent The Drum article picked up this concern about the death of organic reach — a theme written in this blog for over a year.
Whilst branded content ads currently provide brands with an opportunity to boost influencer content to their pages. What if that opportunity becomes an obligation? What if the only way to reach your intended audience is via paid for Instagram boost to them?
Creators, too, usually negotiate additional fees with brands for use of their content on other activations. Rolling branded content ads into one fee risks removing this additional revenue fee.
Instagram is beta testing creator profiles with a small group of high-profile Instagram users and brands to bring awareness to the innovation. But also to prepare the ground for the acceptance of content needing to be promoted through advertising spend to maintain the engagement rates creators have grown used to.
Instagram will be taking a percentage of all goods sold via Checkout. At launch this will be minute. Once this eCommerce initiative is fully rolled out and becomes the norm – the function replacing brand’ own eCommerce sites – this percentage charge will start to creep up.
Influencer marketing after Instagram
So what are the alternatives to Instagram? What would influencer marketing look like after Instagram? Some communicators will be sanguine about the changes. They will understand the new norm is a to pay-to-play on social media platforms. They will reason that paid media claws back control. It allows them to ensure they’re reaching specific audiences that are appropriate for their business. Others will argue that they can already be sure of reaching appropriate audiences through effective audience mapping with influencers.
What would be the triggers which forced strategy and budgets away from Instagram? Where would new attentions lie?
Longer-form video content allows creators and brands to tell a rounded story. YouTube is the natural home of long-form video content. The Google-owned video-sharing platform also benefits from being the world’s second largest search engine.
When you buy a slot on Instagram you buy a moment in time. Adding content to Youtube gives the content legs. The ephemeral becomes the eternal.
YouTube enables creators to be far more creative with the linking out strategy, too. Sure Instagram Stories allows viewers to swipe up to a link. YouTube allows viewers to click links mid-roll as well as to tap links in the caption section.
Long-form video not resonating with your audience? TikTok could be the answer especially if your audience is aged between 16-24. Edgy brands willing to take risks are doing well on this video-looping platform. Lifestyle, music and entertainment are core verticals. Tik Tok has around 500 million monthly active users. It was rebranded last year from Musical.ly
Twitch, the live-streaming video platform was bought by Amazon in 2014 for $970m. Once synonymous with gaming, since the acquisition it has expanded beyond watching people play video games in real time. Amazon Blacksmith was launched in 2018 as an extension allowing broadcasters to configure displays of products associated with their streams with Amazon affiliate links.
Amazon has been quietly building its influencer marketing position for two years. It’s now expanding its reach by accepting micro and nano level influencers. The Amazon Influencer Program allows people with a following on YouTube, Instagram, Twitter or Facebook to get their own presence on Amazon, which can be customised and curated with products they recommend in their social media content.
When customers visit an influencer’s page and shop on Amazon, they get compensated for purchases in a similar fashion as they would with the Amazon Associates program.
Commission is based on a fixed model, meaning influencers get paid a percentage of what they sell.
Amazon’s private-label fashion line is the category that pays influencers the most at 10%, followed by furniture at 8% according to Business Insider. Non-Amazon apparel, jewellery, and shoes as well as Amazon Echo, Amazon Fire, and Amazon Smart TV devices pay a 7% commission.
Amazon made around $9 billion from advertising in 2018. By 2023 this figure could rise to $38 billion according to one analysis.
Evolution of influencer marketing
The most innovative and effective influencer marketing campaigns today are platform agnostic. They form part of a wider communications programmes. These campaigns may well be influencer led, but they might also include media briefings, advertising on Out Of Home assets, earned media, distribution through owned channels.
As strategic communicators we advise our clients to plan for an uncertain future. Who knows what the future holds at Instagram? We do know Instagram’s head. Adam Mosseri, was in charge of the Facebook newsfeed during the reach apocalypse. “Those who do not remember the past are condemned to repeat it”, warned philosopher, George Santayana.
Equally, today Instagram is the platform powerhouse for B2C influencer marketers but how long will its tenure at the top last? Remember MySpace? Google+? Orkut? Friendster? Hi5? Google Buzz?
Watch this amazing animation from The Next Web tracking the rise and fall of social media platforms:
It should go without saying that Instagram is a business. Optimising their future business does not necessarily include boosting your business. The platform has run tests hiding like counts. Last month I hypothesised what would happen if they hid follower counts, too. It’s best to enjoy the present and ask the big ‘what if’ questions to prepare for an uncertain future.