Instagram IGTV video ads arrive as part of monetization push for influencers

Brief:

Instagram started testing features to help influencers make money, a departure from its limits on direct monetization for popular personalities on the photo-sharing app. The features include ads in IGTV videos, digital badges that fans can buy on Instagram Live, product sales from Instagram Shopping and an expansion of the Brand Collabs Manager that helps to connect sponsors with creators on campaigns, per a blog post.
IGTV's ads are geared for mobile viewing and can be as long as 15 seconds. They will appear when viewers tap to watch videos from previews that appear in their IGTV feeds. Instagram will test the ads throughout the year, including the ability to make them skippable for viewers, per its blog post.
Influencers can monetize their posts by selling badges that include heart-shaped icons that appear in Instagram Live videos. Viewers can pay $0.99 for a single heart, $1.99 for two or $4.99 for three, though they are limited to buying one badge each during a livestreamed video. The badges appear next to the viewer's name in the video, helping creators see their supporters, TechCrunch reported.

Insight:

Instagram's test of monetization features for influencers may alter how mobile marketers work with popular personalities who help to keep audiences engaged with the photo-sharing app. Influencers who can make more money creating videos and livestreams for IGTV will have greater incentive to post more frequently and to improve the quality of their work. Those incentives can spur a virtuous cycle of higher viewership and engagement that appeals to advertisers who either collaborate with creators or buy ad inserts in videos.

Next week's introduction of ads on IGTV, which were mentioned in an earlier report, will give marketers a chance to experiment with the platform. IGTV was introduced in 2018 as a standalone app to feature long-form videos from creators and publishers, but the app hasn't gained much traction among Instagram's user base of more than 1 billion. Only 1% of Instagram users had downloaded the IGTV app by this year, per research that TechCrunch commissioned from Sensor Tower. The difficulty in boosting its audience led Instagram to remove an IGTV button from the home page of its app in January.

However, the coronavirus pandemic led to a surge in Instagram viewership among homebound consumers who have relied on their smartphones for entertainment and to stay in touch with the outside world during lockdowns. Creators of videos on Instagram Live saw a 70% increase in video views from February to March, per the company's blog post. Brands such as Cholula Hot Sauce, McCormick and PepsiCo's Tostitos have sponsored Instagram Live events in the past couple of months to entertain viewers and raise money for pandemic relief efforts. It remains to be seen whether IGTV can convert and maintain that Instagram Live viewership as lockdowns end and people gradually leave their homes more often.

The IGTV badges can help lesser-known influencers to develop another revenue stream from their videos, as rivals like Amazon's Twitch, ByteDance's TikTok and Google's YouTube already have done. While Instagram is a major influencer marketing platform, its notable personalities have had to seek their own sponsorship deals with advertisers instead of soliciting the direct support from fans. Kylie Jenner, the reality-TV star and cosmetics entrepreneur, is one of the most prominent celebrities to parlay her popularity on Instagram into million-dollar sponsorships of her posts.

The rollout of IGTV badges follows the app's redesign last month to highlight creators and its offer to cover the video production costs of some influencers who agreed to expand their content work on IGTV. The combination of these programs is likely to urge more influencers to create videos for the platform, giving mobile marketers more opportunities to participate in collaborations with influencers and to reach engaged audiences.