by Jennifer Caoli, CDAE Public Communication major at the University of Vermont.
As social media have become prominent in today’s society, businesses find it necessary to take part in the social media phenomenon, specifically Instagram. Having your company be on Instagram is one thing, but it’s another thing to have your business featured in the Instagram sponsored business ads. Instagram is a free, social media platform that allows the sharing of photos and videos to other public or private accounts. Instagram was founded and launched in October, 2010 by Kevin Systrom and Mike Kriege. Since then, the app has only continued to grow and gain popularity. Today, the app has more than 800 million monthly active users. What many businesses fail to understand, however, is that the way a company presents itself on a platform such as Instagram may actually do more harm than good in terms of sales overtime.
Instagram may be a great way for companies to advertise their products and boost sales, but only if handled correctly. Half of the problem is that people don’t do their research before they start posting on their company’s Instagram. What may look good to one person, may not look as intriguing to others. Also, sponsored ads are not good for business in the long run. Companies can sign up for Instagram sponsored ads through Facebook. They can filter the audience by demographics such as age, gender, and interests. Facebook claims that these ads are effective in increasing sales and that they blend in with the natural flow of the Instagram feed, when in reality, many users can’t stand the idea of these ads. Users want to be able to scroll through their feed and see content from the accounts they chose to follow, not get bombarded with ads for accounts they did not sign up to see. It may at first seem like sales are improving due to these ads, but eventually people will get fed up with the same ads popping up over and over again and before you know it, sales will begin to decline for that company.
Temple University’s news website featured an article that contained a study at the Fox School of Business led by Shuting Wang, a third-year Ph.D candidate in management and information systems, that suggests that the long term effect of social media posts actually result in an overall decrease in sales. The study found that “purchases by followers increased by 5% on the day of a company’s social media post. But this same post also increased the likelihood of a customer to unfollow by 300%.” Eventually this would lead to a 5% decrease in sales in five months and a 20% loss of followers in a year. Going off the idea of users being fed up with ads, Instagram recently introduced a new algorithm that placed high paying business ads at the top of the feed. This feature “benefited large brands and companies who were willing to put more money up front to get seen on Instagram.” This only further upsets users because, again, it hinders them from enjoying the content they signed up to see. Lastly, an article on Entrepreneur.com called Why Converting to Instagram Business is Not a Good Brand Strategy, by Madeline Popelka, claims that “brands that do not convert to Instagram business profiles will stay ahead of the curve” for three reasons; you’ll maintain your organic reach, you’ll avoid being labeled as “sponsored,” and your brand will be able to “act human.” All in all, Instagram is helpful in terms of getting a name out there, but when it comes to business profiles, it’s better to stay away.