The Ins and Outs of Instagram Ads: What You Should Know

Insights / 06.18.2014

4/22/2024 9:21:16 PM Red Door Interactive http://www.reddoor.biz Red Door Interactive

Check out our updated Instagram Ads blog post here.

Instagram is a Facebook owned application that allows users to upload, share, and interact with each other’s photos and videos via a photo stream. It has over 200 million active users worldwide, 60% outside the U.S., and 55 million photos loaded daily. The app announced its decision to open its network to advertisements in 2013 in order to build itself as a business and allow brands to further connect with audiences. In June 2014, Instagram announced it will begin expanding its ad platform outside the U.S. to international countries, starting with Canada, the United Kingdom, and Australia. More countries across the globe will be added in the future. 

How do Instagram Ads work?

Instagram advertising is not open to the public quite yet, but the app is conducting “trial runs” for select brands and through its partnership with Omnicom. The ads appear in a user’s Instagram feed with a “Sponsored” label in the upper right hand corner and are held to a print worthy, high standard of photo quality and creativity in order to minimize disruption to people’s feeds and promote engagement. 


Currently, when a user is served an ad, they have the option to like, comment, or hide the ad from their feed. If a user decides to hide the ad, they are able to provide feedback about what they don’t like about the ad or why they aren’t interested in it. This is meant to help improve ad serving over time and learn more about the user’s behavior and interests. As the ad platform continues to develop, Instagram will continue to enhance and change ad serving tactics based on brand and user feedback. Through the Omnicom partnership, the new ads in a user’s stream will be controlled so that it stays present in a user’s Instagram feed for an extended period of time, longer than a day and will have the same high quality photo and video standards. The selection process for where these ads appear (i.e. the Instagram audience being targeted) is selected manually.

There are no specific rate cards available for Instagram Ads, since it just launched. Recent feedback from brands that participated in the trial stated that the CPM costs to advertise with Instagram are much higher than the cost to advertise on other social sharing sites and networks. Lower end monthly pricing is estimated around $350,000, while higher end can get up to $1 million. While prices are high, the test campaigns yielded thousands of photo likes and an influx of new followers for the brands. 

These ads are valuable to advertisers due to their native-style. They flow through a photo stream where users view photos one at a time – guaranteeing their photo will have a high impact placement to the user. Due to the fact that Instagram Ads are prominently flowed through a user’s organic feed, Instagram has received some negative feedback from their users as they slowly roll out their advertising platform. However, overall results for advertisers have been positive, with some seeing performance above the ad industry’s average in terms of engagement and brand recognition.

Is it worth it?

While there are some risks in advertising on Instagram, like the potential of negative comments from users and high costs, the company is still conducting research through various trials in order to minimize any setbacks of officially launching its ad platform. When advertising on any social platform, it is best practice and important to ensure you have a social content strategy in place to manage user feedback and interaction with your brand. This cannot be overlooked when investing in advertising on Instagram, where users are extremely active and engaged with the content.

Instagram offers a great opportunity for advertisers to connect with people through beautiful, high quality images. It will help spearhead the initiative of how brands should relate to their audience to keep them engaged and satisfied through relative content. In the end, it will be about quality over quantity for this platform. Rather than bombarding users with multiple impressions, advertisers will need to focus on how to capture attention within the first impression. Beautiful creative partnered with relevant, intriguing brand content could be the perfect recipe for a successful Instagram Campaign.




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