Advertisers have been successfully running ads on Instagram for just a short time now, compared to its competitors, but early indicators point to Instagram pay per click advertising being more successful than top platforms like Google AdWords and Facebook.
One of the first companies to advertise on Instagram was SalesForce, who released aggregate results of the first two weeks using Instagram PPC advertising. SalesForce determined the average price per ad impression was costing 90% more Instagram than on Facebook, at $6.29 per thousand impressions. You may initially think a significantly higher cost is a bad thing, but let’s look at the reason for the price difference, and at what Instagram advertisers are getting for their money.
Higher Conversions than Facebook
One key factor driving up the average price of an Instagram advertisement is the fact that Instagram users are actively clicking on ads! SalesForce realized a 1.5% click-through rate on Instagram ads where customers bought through Social.com. On Facebook, the average click-through rate proved much lower, just 0.84%, and sales much lower still.
Higher conversions lead to higher ad prices on a per-impression basis. Cost per click on Instagram and Facebook are close, at about $0.42 for Instagram, and $0.46 for Facebook, and yet, Instagram shows a much higher ability to lead to conversions.
Why are users clicking on Instagram ads more than Facebook ads, and are these rates sustainable? One factor that may be driving Instagram’s success is the newness of it all. With paid advertising being relatively new to the platform, Instagram users perceive the content as fresher and more novel than Facebook’s model, making the user more likely to want to see what the ad is all about by clicking on it. Whether this advantage is sustainable long term is yet to be determined, but a short time in, it’s still a key factor in Instagram’s success. Another factor we’ll discuss more in-depth later is the organic feel of Instagram advertising that flows more seamlessly in a user’s feed.
Instagram’s average user is much younger when compared to the average Facebook user. Young people have made Instagram their social media platform of choice. Young people, with their higher amounts of expendable income, drive up conversions and build long-term brand loyalty, which pays dividends going forward.
Better Conversions from Young Consumers than Google AdWords
Google ads work with a keyword scheme. Businesses bid on selected keywords for the chance to have their ad displayed when those keywords are searched. Google ads are priced with bidding, meaning the amount a company pays for certain keywords can vary widely. Given Google’s position in the market, there is a significant amount of competition for keywords, which raises the costs associated with those ads dramatically.
Google does offer a strong click-through rate of 3.6%, but this is because customers searching for those keywords were already interested in whatever was being advertised. However, Google’s model lacks the ability of Instagram to target consumers who are not specifically looking for a product or service, and has shown a much lower rate of success with younger consumers who are key drivers of a brand’s future success.
Creating Successful Instagram Ads
Still, to match the overall success of Google, Instagram ads have to be bold and compelling enough to compete with the sheer size of the digital behemoth. Let’s take a look at what Instagram advertisers can do to have the momentum on their side, succeeding even against a giant like Google.
One factor decisively driving Instagram’s advertising success is high quality content. Because advertisements can show up on a user’s feed whether they follow a brand or not, these ads need an organic feel, one that flows naturally with the overall sense of the user’s feed. Hitting the sweet spot can lead to impressive returns. Ben & Jerry’s Ice cream reached nearly 10 million people in just 8 days on Instagram by creating advertisements that were less about direct conversion and more about branding and sharing the company’s values.
Advertising designed to promote a company’s brand and values allows for a diversity of imagery to be used. A company wishing to appeal to consumers who value American made products can win people over with Americana, such as images of flags, vintage cars, landmarks, beautiful vacation spots, and other things uniquely American. A fashion brand may want to focus on cutting edge design, celebrities who wear their brand, art forms, and creative use of color. Food and beverage brands can creatively use their logos and products in countless ways.
Maximizing a Targeted Demographic
Instagram uses the demographic data of Facebook to match up ads with those most likely to respond to them. For example, a 50-year-old male may more likely be targeted to receive car-buying ads than ads for beauty care products.
Given that Instagram is known for its rich and attractive visuals, even the best demographic targeting won’t lead to the success advertisers are looking for if photographs are not dynamic and artistic enough to capture people’s attention.
It is always best to avoid stock photos, and if it’s in the budget, hire a professional photographer who can work with angles, lighting and visual elements to create the best possible content. Instagram also offers a variety of filters to add interest to photos, although the most popular photos use no filter at all. If you do decide to use filters, keep in mind that filters allow you to adjust the intensity. Make sure the filter adds to your photographs.
A Clear Opportunity
Instagram is now one of the most popular social media platforms, ranking as the 21st most popular site in the US and the 41st most popular site worldwide. It is routinely used by celebrities, businesses and everyday people. Top brands like Nike, Starbucks, NBA, Adidas Originals, TopShop, Forever 21, Vans, NFL, Michael Kors and GoPro are the most popular businesses on Instagram. Over 90% of Instagram users are under the age of 35, with 28% of users in the 18-29 year old age bracket.
The appeal cuts across all races, genders and income brackets, and the average users logs more than 257 minutes per month perusing the site. There’s never been a better opportunity for advertisers to build their brand and promote their products than getting onboard this still growing platform.
About the Author:
Richard Sutherland writes about digital marketing, social media and business. You can read his other articles here at the 360contentpro.com blog.