Instagram will Aim Ads at Small and Foreign Businesses

 

    When Instagram’s sharing app was purchased by Facebook in 2012, it was suggested that it would be run independently. However, it seems there’s an inevitable increase of integration. 

 

    Chief Operating Officer, Marne Levine, said, “When we launched ads two years ago, ads were available in just eight countries. In September, we opened for business in around 200 countries. What you’ve mostly seen so far is bigger brands and bigger businesses using advertising to connect with consumers. I think what you’ll see in 2016 is small businesses starting to advertise more and take advantage of this platform.”

 

    Ms. Levine added that international expansion was a priority, with 75 per cent of its more than 400 million users located outside the US.

 

    Brazil, its second-largest market, has about 29 million users with the UK and Germany also providing millions of users.

 

    It hasn’t been said what amount of revenue Instagram generates for Facebook, although estimates suggest between $1.2 and $2 billion in 2016. That’s about 10% of their entire revenue.

 

    As political campaigns invest more in online advertising, Instagram benefits and this year’s US presidential election is one of those opportunities. Ms. Levine said, “The 2016 presidential election is going to be the most visual election that we’ve had to date.”

 

    Facebook and Google are facing competition from newer rivals like Snapchat, and Pinterest. As Instagram is expanding their reach, Facebook’s new messaging app, WhatsApp, is also generating revenue along with Facebook Messenger. Advertisers are now able to include links to their products and websites on Instagram’s new advertising format called “carousel adverts”.

 

    There are also 30-second videos. This is a typical length for marketing clients and the same time slot as traditional TV ads. However, the company has no plans to introduce a “Buy” button yet, although retailers would like users to be able to click through to purchase.

   

    Half of the population of American teens are regular users of Instagram, which makes it very attractive to advertising companies. And, about half of the population between the ages of 18 and 29 are using it.

 

    In Europe, that situation may be threatened by new regulations on data protection introduced by the EU. It had been proposed by Brussels that anyone under 16 years of age should require parental permission in order to join groups such as Instagram and Snapchat, etc. Large techno groups, which included Facebook, helped to lower the age on the proposed restriction so that personal data may now be used by those as young as 13 years old.

 

    Ms Levine said, “The issue of raising the age for parental consent has definitely caused some concern. It makes it harder to do business in Europe if you have a patchwork of different laws across different countries.”