Brief:
- Instagram will place ads in its Explore section that shows users personalized content based on their interests, giving mobile marketers a chance to reach highly targeted audiences, according to a company announcement. The Facebook-owned app won't show the ads in the initial Explore screen, and instead will insert them into the results feed that appears when users tap on featured content.
- The social platform plans to introduce Explore ads "slowly and thoughtfully" in the coming months, and will give users control over what ads they see based on their actions in the app.
- Advertisers can extend their Instagram ad campaigns to the Explore section by opting in to use automatic placements, per the announcement.
Insight:
Instagram's Explore feature is one of the most engaging parts of the image-sharing app because it shows users personalized content based on their interests and platform history. For mobile marketers, such self-selecting audiences present a significant opportunity to reach target consumers on a large scale.
In the U.S., Instagram usage is forecast to grow to 117.2 million people by 2021 — 55% of all social network users — from 106.7 million this year, according to eMarketer research. The researcher estimated before this week's announcement about Explore ads that the app's ad revenue will grow to $15.7 billion by 2021 from $9.1 billion this year.
Instagram's gradual approach to adding ads to the Explore tab indicates that the app doesn’t want to negatively affect the user experience amid competition from rival social networks.
"The demo shows how seamlessly the sponsored post fits into the Explore feed, so Instagram is at least easing users into the transition," Dan Goldstein, president of digital marketing agency Page 1 Solutions, said in emailed statements to Mobile Marketer. "The biggest hurdle for any platform trying to introduce ads in a previously non-commercial space is minimizing interruption to the user experience while satisfying advertisers that their content will be seen."
Photo or video ads will appear among Explore posts with images, while only video inserts will be seen among video posts.
"Given the Explore feed's prioritization of video, it will be important for brands to find ways to make their video assets stand out in the sea of photos and videos," Carly Carson, director of social at digital agency PMG, said in an emailed statement. "By ensuring ad targeting aligns well with video content, the Explore ads will feel contextually relevant to users who are exploring topics that are interesting to them."
Because Instagram's Explore tab urges users to spend more time with content, long-form video ads may be more suitable for marketers, Carson added.
For Facebook, adding ads to the Explore tab in Instagram may generate $1.2 billion in revenue by 2021, according to Morgan Stanley analysts cited by Bloomberg. The estimate is based on monetizing Explore by $2 for every Instagram user, and maintaining current growth rates of its user base. The two biggest hurdles will be the rollout pace for Explore ads and whether they cannibalize media spend on Instagram's news feed and Stories. Similarly, Facebook last month said it would start putting ad inserts in WhatsApp, the messaging app that previously had resisted ad sales.
