How the Smartest Brands are Driving Meaningful ROI on Instagram
Hey guys. I’ve been deep, I mean really deep, on Instagram for the past six months with my team at Dash Hudson. Instagram is a real platform, with a real audience, and real challenges. Dash Hudson provides a solution for brands to grow their audience and revenue on Instagram. I’ve seen things, and come to learn a lot about the social dynamics, economics, and opportunities on this fascinating platform. Here are some learnings from a half year of hard scrolling.
Growth: From 0 to 300m, Real Quick
When it debuted in 2010, Instagram was the perfect offspring of social network veterans Facebook and Twitter, a place where users could upload the photo that was too good for Facebook, while embracing the minimalist manifesto of Twitter. No albums or diatribes, just a quick description, and a photo filtered to perfection. An almost-immediate global success, Instagram took half the time of Twitter and two years less than Facebook to gain 150 million monthly active users. 53% of 18–29 year olds in the US now use Instagram and it is the social network that boasts the highest engagement among teens.
A picture is worth an exponentially compounding growth curve, apparently.
The follower / following relationship on Instagram has enabled those of social influence (celebs, athletes, models, and the uber-stylish) to build large, organic one to many audiences. Those audiences engage around photographs that convey a highly desirable lifestyle. Brands, busily marketing to fans through twitter accounts and Facebook pages, have taken notice of Instagram’s influence. According to L2, 92% of prestige brands have an Instagram account, with 63% of these brands linking to their accounts from their official websites. We estimate that brands are spending upwards of $1 billion per year on sponsored Instagram posts (tags and product placements). It is clear that Instagram is not just a photo sharing app, but a place where brands and influencers can reach engaged consumers, build brand awareness, and successfully promote products.
A Killer Audience: Enter the Kardashians
Instagram is so much more than just a collection of cool kids aiming to hit that seemingly unreachable 10,000 followers. There is an echelon of users who wield massive amounts of influence. Instagram’s most influential users include Kim Kardashian (and the rest of the Kardashian/Jenner brood), model Cara Delevingne with her quirky pictures and quotes, and pop star Rihanna with her risqué, and at times Instagram-censored, shots. What these celebrities have in common is that they have a lot of followers (Kim K has 25.1 million) and a lot of influence. The visual focus of Instagram has been a boon for the genetically blessed. Top model mega babes like Rosie Huntington and Candice Swanepoel blend images of the catwalk with behind the scenes and sunny vacas to deliver an attractive, and visceral experience to dedicated followers.
Apart from the Instagram A-listers, there is an entire world of the ‘famous on Instagram’ that occupy a different level of the hierarchy. While these people may not walk red carpets, their stars can rise quickly and burn brightly. In the Instagram era, anyone who fancies themselves a photographer, style guru, or model can become one. For example, relatively unknown fitness model Jen Selter amassed 5 million followers by posting beautiful, athletic shots featuring the fitness routines that keep her assets in shape. Models, like Guess girl Simone Holtznagel, who was found through Instagram by Guess founder Paul Marciano, have been discovered because of their profiles. Refinery29 and Nylon regularly feature the hottest new faces from Instagram in their pages. YouTube’s young generation of stars, such as Acacia Brinley and Amanda Steele, have seamlessly transitioned their massive influence from video to Instagram, and make up a fast-rising portion of the ‘non-celebrity’ influencers. In fact, many of these stars are bigger and wield more power than do ‘traditional’ celebrities. Some command as much as $10k per Instagram post and $25k per YouTube integration. I’ll be following up on this post with more information on how to find and engage the right talent for your brand, and how to build campaigns that get measurable results. Get your popcorn ready.
Instagram stars are becoming so powerful that there are now agencies that work exclusively to manage their business affairs. Agencies like The Socialyte Collective, Digital Brand Architects, Niche, The Influencer Network, Fullscreen, and InstaBrand connect influential social media stars with brands and retailers for projects that include content creation, sponsorships, endorsements, and contests.
Instant Brands: Swimwear and Beauty for the Win
If you spend any time scrolling (or trolling, depending on your ilk), you have seen tags and promotions for brands building almost exclusively through the photo sharing service’s massive distribution channel. It’s no surprise that highly visual products work well on Instagram, and young brands are benefiting. Swimwear brands Triangl Swimwear, and Sahara Ray Swim have grown quickly by distributing product to the world’s best, and most liked, beach bodies. Internet beauty brand Glossier, headed by the magnetic Emily Weiss, has leveraged its connections with the fashion elite to market its products through Instagram (I want one of those lighters, Emily). Brandy Melville and J.Galt seamlessly blend Instagram user generated content with editorialized promotion to great effect.
Visual products, from fashion to beauty, can grow rapidly by placing their products in the right hands, and on the right bodies and faces, of Instagram’s influencers.
Real Problems: OMG Where Did You Get Those SHOES?
As Instagram and its community of creators matured, the volume and quality of lifestyle and product imagery dramatically improved. Suddenly, the mindset of audiences began to move from pure engagement to expressed intent around images of coveted products. The ‘like’ is a powerful mechanism in social and it has become apparent from user engagement and photo comments that it often implies direct intent to purchase. The addition of tagging, which allows users to tag the brands they are using, has further amplified this.
Here’s the rub. Instagram has wisely protected the sanctity of its photo driven newsfeed by barring live links in photos or comments. For consumers and brands alike, there is a love / hate relationship with the lack of links. It has, until now, made shopping complicated, and ROI measurement impossible. Instagram will for the first time this year, allow brands to inject ‘carousels’ ads into newsfeeds with clickable links. But no solution remains for brands to connect with talent to create native, organic campaigns that convert.
The Erstwhile Problem Solvers
The difficulty in trying to find and purchase an item through a brand’s website after seeing it on Instagram has not been lost on companies and innovators. A small cohort of start-ups has tried to solve this problem by creating a more efficient way to buy what you like. One solution that has gained popularity, particularly with fashion bloggers who take to Instagram to share their outfits, is RewardStyle’s LiketoKnow:It. While fashion bloggers regularly imbed shoppable links on their websites by using RewardStyle’s venerable affiliate system, its traditional linking approach does not work for Instagram. LiketoKnow:It attempts to solve this by creating a system where an Instagram user who ‘likes’ the photo featuring a LiketoKnow:It hashtag and identifier link is emailed details of the blogger’s outfit with links to purchase these items on the respective retailer sites. It requires a user to transition from the native mobile experience of Instagram, where they have demonstrated intent, to email, and across multiple steps to the retailer’s checkout.
Bloggers, and those that power their economic engine, aren’t the only ones looking to capitalize on Instagram as a potential shopping platform. Brands also want to make it easier for their customers. The app Soldsie works with both the retailer and the Instagram user to process purchases through Instagram. Similarly to LiketoKnow:It, the retailer and user must be signed up with Soldsie in order for the transaction to work. If a retailer is registered with Soldsie, a user can comment on a photo with ‘Sold’ and hashtag his or her preferred size. Soldsie will then process the transaction via an email invoice and confirmation steps. Chirpify also allows users to comment on a brand’s photo with a specific hashtag and then receive a direct message from Chirpify which gives them directions on how to get to a payment page. Keep.com, while similar to Pinterest in its cultivation of products a user wants, has an Instagram feature that displays photos of Instagram’s most popular and fashionable users. A Keep.com user can receive details of these outfits or at least a look-alike version. This is a curated experience, but wholly separated from a consumer’s activity on Instagram.
The new (and well-heeled) kid on the scene, Spring, takes Instagram out of the equation and has built its own photo-driven platform specific for brand photos. Brands integrate into Spring’s back end and then post photos which can be shopped by Spring’s users in just a few touches. An early review from Fashionista.com notes that Spring is efficient for the shopper and gives particular credence to its well designed one step check-out service. Because it is a shopping app that works outside of major distribution platforms (because it aims to be one itself), Spring must focus on building a native audience of engaged users within its high end target demographic.
What’s Next?
The crux of the matter is that there is a problem that is begging to be solved. Instagram’s new clickable ad unit certainly goes part of the way to helping large brands drive traffic, but the power of Instagram truly rests with its creators. For brands, there is a clear opportunity to generate and leverage Instagram engagement to build community and drive meaningful sales through native content. Especially prescient is the need for brands to connect with teenagers, 76% of whom now use the platform.
For this new generation of shoppers, Instagram is their stage, their glossy mag, and their shopping mall.
What’s next in the world of Instagram shopping is wholly dependent on the creativity and commitment of innovators, agencies and brands that see Instagram as the next frontier of commerce.
If you are one of them, I would love to hear from you.
Email me at thomas@dashhudson.com and I’d love to share some additional insights on how your brand is performing on Instagram.
Also, check out our blog for more killer tips on building beautiful Instagram campaigns that convert.
PS: Special thanks to Katie, who cowrote this. Also to digital brand superstars David Alston, Erik Lautier, Ross Simmonds, and PumpUp cofounder Phil Jacobson for their killer feedback and input.
