The Potential in Instagram for Businesses

Image courtesy of
Image courtesy of

As one of the fastest growing social media platforms available, businesses can’t afford to ignore Instagram. Even though click-thru links (links that take you to the company’s website) are not supported by Instagram right now doesn’t mean it’s not a possibility in the future. Before businesses write off Instagram as a social media platform solely for friends to share “artsy” pictures of their sandwiches, they should consider the future marketing potential in Instagram. Nothing encourages change more than money, and Facebook (Instagram’s parent company) stands to make a large profit if certain changes are implemented in Instagram to support marketing activities.

Instagram is on the rise
As of March 26, 2014, Instagram had more than 200 million active users, which is twice as many users as they had when Facebook acquired the company in 2012. Twitter still holds a marginal lead with 241 million monthly active users, but Instagram is expected to take the lead in the near future.

This massive growth is in part due to the increased use of smartphones around the world (and because people love to post selfies). According to an eMarketers analysis, an estimated 30.8 million Americans used Twitter from their smartphones in 2013, with that number estimated to increase to 37.3 million in 2014. Not to be out-done, eMarketers estimated that Instagram had 34.6 million American users in 2013, and that number is estimated to reach 40.5 million in 2014. With such staggering usership, it’s obvious that Instagram is a goldmine for marketers (especially those looking to reach the 13-30-year-old demographic).

Why businesses are not on board (yet)
For the most part, social media marketers have focused their attention on Facebook and Twitter because those platforms have something Instagram does not: enabled click-thru links. Currently, Instagram does not support images or links that would re-direct user to companies’ websites. This is a major turn-off for businesses, as the main purpose of social media advertising is to drive customers back to the sponsor’s website to encourage a conversion.

But what companies need to keep in mind is that social media is an ever-changing advertising platform, and as seen in the past, Facebook is not afraid to make changes in an effort to generate more profit, for themselves and their paying customers. Getting in on the ground floor with a popular app like Instagram, and building your following early, can only help if and when these changes are made.

Change is on the horizon
Facebook would be hard-pressed to turn a blind eye to the revenue-generating potential in Instagram. Facebook learned from their mistakes in the past, going from seeing mobile as a weakness in 2012 to having Facebook mobile represent 53% of its total revenue by end of 2013.

This massive increase in revenue is largely thanks to the implementation of paid advertising, allowing companies to track the success of their advertising with embedded links to their website. Facebook generated $3.10 advertising revenue per daily active user in Q4 2013, and is expected to raise that dollar amount by 76% to an astounding $12.40 by Q4 2014. Taking these numbers into account, Instagram stands to make Facebook an enormous amount of revenue. With the conservative number of 75 million active users in December 2013, Instagram could generate over $900 million in revenue from paid advertising.

Why businesses should be on board
Considering all the staggering statistics, most industry insiders expect that Instagram will soon support click-thru ads. With that change in mind, businesses should establish themselves now on Instagram, rather than trying to make a name for themselves after the announcement of click-thru link implementation (when everyone and her sister company will be jumping on the Instagram bandwagon). Companies will be scrambling to establish their brand and build a following on Instagram, but as many of us know, building a network takes time. By establishing your brand now, before the madness, you can reap the rewards while everyone else is just starting to get their feet wet.

With moneymaking potential simmering just under the surface, why not include Instagram in your social media efforts? A small time & energy sacrifice now has the potential to net great rewards in the future. Let’s face it, Instagram is not going anywhere. People like pretty pictures, you can make pretty pictures, so why not get ahead of the pack and start networking?

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