Instagram: Is “Ad Reach” Reaching for the Stars?

"Instagram has taken over as a primary method for brands to communicate and connect with existing and potential customers."

Instagram has taken over as a primary method for brands to communicate and connect with existing and potential customers. To do so brands utilize sponsored advertisement to expand their reach, but the real question is: Does more reach mean more business? Every time someone surfs Instagram they are exposed to advertisement, however we often do not focus our attention on them or may not even notice they are an ad. On a subconscious level, we are interacting with these brands and forming opinions about them without conscious effort. This is why social media advertising is so important. Companies can impact our lives on a regular basis and gather information to make their impact even stronger in following campaigns. Instagram enables companies to use tools that aggregate “big data” to help you find the correct audience without the need for extensive research. Instagram continues to roll out new ways to gain followers for your business including but not limited to business pages, live videos, and stories. The power is now in your hands to make an impact.

Instagram currently has 500 million monthly active users who have collectively shared over 40 billion photos. At a first glance it’s surprising that not all companies are using Instagram with such a large reach of users. As of right now only about half of the US brands are currently utilizing Instagram to grow their market and relate with individuals. However analysts have pegged that statistic to move up closer to 70% within the next year. So why are so many people looking to move to Instagram? Engagement is key to advertising. On a limited budget, maximizing the effect of your ad spend is crucial. 75% of Instagram users actually engage with a brand after seeing an advertisement. And ultimately engagement is what is converted to real currency (Parker). Researchers have investigated how susceptible we really are to ads and the results are not surprising. Testing was conducted by monitoring the brain patterns of subjects who were exposed to advertisements. The results showed that an ad as short as 30 seconds can stimulate your brain. Although you may perceive this as passive, your mind is going haywire with connections and associations about the brand (Cueva).

Many companies have dipped their feet into social media and there is no “correct” platform for all businesses. However that said certain platforms offer more opportunity than others. HiSmile a startup dental cleaning service that began using Snapchat as their primary social media shared information about their journey. They began using Facebook and Instagram to boost their business for one reason, the bottom line. They claim that the main motive to switching to Instagram was the option to advertise utilizing the user data collected by Instagram. Although you can sponsor on Snapchat, you are unable to pick a specific type of audience to market to which leads to many wasted dollars (Bailey). With the need for these tools over 1 million active businesses advertise on Instagram (Levy). There is a strong movement for companies to use these tools and no signs of it slowing down. Instagram ads are here to stay and it’s your turn to start posting the smart way.

Author: Brandon Mattioli (University of Vermont) –Majoring in Business Administration (Marketing); Minoring in Economics.

Advisor: Rob Williams, Ph.D. (University of Vermont); Professor of Media/Communications.

Sources:

Bailey, Michael “HiSmile channels $10m ad budget to Facebook/Instagram over SnapChat” The Australian Financial Review Magazine 4 April 2017 https://www.afr.com Accessed 4 April 2017.

Cueva, Maya “This is Your Brain on Ads An Internal Battle” National Public Radio, 14 June 2011 http://www.npr.org Accessed 29 March 2017

Levy, Adam “Instagram Is Set to Make a Killing in Advertising in 2017” Fox Business 26 March 2017 https://www.foxbusiness.com Accesed 30 March 2017

Parker, Sydney “A Long List of Instagram Statistics That Marketers Need to Know” Hootsuite, 3 November 2016 https://www.blog.hootsuite.com Accessed 2 April 2017

 

 

 

 

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