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Is Instagram a #sellout?

There’s a change afoot coming to an Instagram near you. As of last week, Instagram announced it would begin rolling out ads on Australian feeds after successful tests in the US.

Here’s the low down – 15 brands were chosen to take part in a trial of paid Instagram ads since November 2013, of which included Taco Bell, Michael Kors and Ben & Jerry’s.

The results? Taco Bell’s grams achieved tonnes more engagement than its organic posts (approximately 400% more) and a boost of 45% in their following (source: Union Metrics).

Michael Kors received 218,000 likes on their ad, which according to Nitrogram is 370% higher than their organic posts and 33,000 new followers in only 18 hours.

Ben & Jerry’s has a similar story to tell – 386,877 likes, a 2000% increase versus organic reach (source: Adweek) and a jump from 429 to 7200 new followers per day.

By all counts, the results are very positive. But a part of us can’t help but notice that Instagram, a social platform hesitant to rock its 200 million strong boat too hard, has played it very, very safe.

American fast food chains and megaretailers are one thing, but how effective will Instagram ads fare for smaller, Australian brands?

The answer could be found in history.

In 2011, Twitter launched Promoted Tweets with a hefty minimum spend for brands of $30,000. This meant it was mostly only larger brands who could afford advertising on Twitter while the medium was still relatively unsullied and, consequently, the demographic more receptive. Over time, this minimum spend has been reduced to become more affordable for smaller players.

It’s our opinion that Instagram will do the same. While Instagram feeds are still clutter-free, and the Australian public still warm to the idea, ads will likely be out of the price range for most.

There is one argument to be made for smaller brands though – Facebook-owned Instagram has the luxury of hindsight, and is eager not to make the same mistakes its parent company made when it first ran ads.

Advertisers are required to play by Instagram’s rules. No URLs. No spam. No clickbait. In addition, Instagram pulls in your Facebook likes and interests to target and curate advertised content to each individual user.

The result though is an ad which will be seen by more people, younger people, and generally more receptive people. You may be paying a premium but you’re getting a higher-quality consumer out of it – at least for now while it’s hot off the press.

Written by Stephanie Nuzzo & Mark Starmach

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