How Instagram creates demand

Recently, Instagram announced “action-oriented” formats of its in-app advertisements — allowing for viewers to purchase products from an Instagram post much more easily than before.

What has always made me bullish on Instagram’s viability is its ability to bolster desire in a product or experience where before there was just casual interest.

Upon signing up for Instagram, I followed many Big-Brand accounts. For example, like almost 2 million other people, I follow the Nike Sportswear account. Like at least 75 million other people, I go through my Instagram account daily (2013 estimate). As such, every day there is a good chance that I will see an official brand account putting its wares on display.

Below, the official @nikesportswear account declares this Air Max 90 the sneaker of the week. The account uses the caption to highlight the history and advanced construction of the shoe. The caption goes on to end with making the viewer aware that the shoe is available for both Men & Women to be found in select retailers.

To which one might say, “hmm,” before continuing to scroll through the remaining deluge of pictures awaiting them.

Then, you might see a celebrity wearing similar shoes in his/her daily life. Below, LeBron James sports his own Air Max 90s, using his caption to speak plainly about Nike’s general greatness (“#SwooshLifer, #NikeOrDie”), a sentiment the official Nike Sportswear account just implied.

To which, one might say “hmm cool,” before continuing to scroll through his/her waterfall of a timeline. This celebrity endorsement continues to nurture the interest in the product sparked by the official account or vice versa, depending on when you saw each image.

Then, you might be one of the 475k followers of the @outfitgrid account. Followers of the account have the option to ‘like’ or comment on the outfits chosen for display. While there is no overt mention of Nike endorsing or advertising on the @outfitgrid account, the account is run by Dennis Todisco, Nike Sportswear’s Global Digital Brand Manager.

Let’s face it, LeBron is a paid Nike evangelist but these individuals are regular people. They can show how such a purchase might fit into your life i.e. what other items of clothing you could buy to go with such a purchase. Furthermore, followers of the account showcase their approval of the outfit on display via likes or comments. This subconsciously convinces those viewing the account that if they also purchase such a shoe/outfit, that they will also get that same community approval. Now, imagine the new Instagram “Shop Now” button subtly placed right below that picture (right where your thumb is). Even if one does not purchase right then and there, the suggestive wording, placing of the button, and nature of the account have planted a seed in your brain to really want that product.

The interplay between official and “influencer” or “lifestyle” Instagram accounts can turn casual fans into real consumers. Instagram doesn’t just show you the same “advertisement” over a period of time like a television ad. Instagram can advertise the same product to you over and over through different points of influence. In the future, Instagram could track the interest it is cultivating in products from beginning to purchase.

Now, compare the above to a ‘Shop on Google’ advertisment.

As you can see, this kind of advertisement doesn’t do much to entice you into wanting the product you’re searching for at a given time. That’s because these kinds of ads take for granted that you already know what you want.

However, what if Instagram can create a vibrant ad experience that can track from a user’s first point of interest in a product all the way to the purchase event? What if Facebook decides to retarget some of these Instagram brand posts (which are in effect, advertisements) onto its much larger Facebook platform? If Facebook can deliver that vibrant ad experience to its 798 million (March 2015) mobile daily active users, things could get interesting.

If in the future, Instagram can harness the profile of a brand’s potential consumers (continuing with the example: the overlapping of the kind of individuals who follow the @nikesportswear, @kingjames, and @outfitgrid accounts) and deliberately guide users through this interest funnel all the way to the purchase event, Instagram could create demand and inculcate a person’s purchase intent on a much grander and systematic scale.

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