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Instagram's Ad-Supported Model: How Can Instagram Succeed?

by Vahe Habeshian  |  
November 27, 2013
  |  2,170 views

Instagram inaugurated its ad-supported model with an ad for a Michael Kors watch that showed up in the feeds of Instagram's users on Nov. 1.

The launch of advertising on Instagram was met with mixed reactions, probably in part because the ad didn't feel contextually relevant to the audience viewing it.

What's not in doubt is that by some measures the effort was an overwhelming success: "18 hours after having been shared, the promoted post had received 217,700 Likes, a 370% increase compared to the 46k the designer brand is used to seeing on average," according to Nitrogram, an Instagram analytics and engagement platform.

In one sense, though, advertising on the mostly mobile social platform is nothing particularly new: As Om Malik points out on Gigaom, "Instagram power accounts—well-known Instagrammers with tens of thousands of followers—are pushing their own form advertising [by] putting hashtags of commercial products" with the images they post.


Here, three online advertising and marketing executives discuss both the first official Instagram Ad as well as Instagram's strategy and what it needs to do to become a successful platform for marketers and advertisers:

  1. Ferdinando Verderi, creative director at creative agency Johannes Leonardo, and head of JLF, the agency's division dedicated to fashion, luxury, and art.
  2. Tony Winders, SVP of marketing for in-screen ad network GumGum.
  3. Fritz Desir, SVP, head of experience planning, at customer experience agency RAPP.

They answer these three questions:

  1. What does Instagram need to do to keep from alienating its loyal fan base as it rolls out advertising?
  2. What can marketers learn from Michael Kors's bold inaugural journey into Instagram advertising?
  3. Is there any value for brands advertising on Instagram if their ads are not targeted?

What does Instagram need to do to keep from alienating its loyal fan base as it rolls out advertising?


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Vahe Habeshian is the director of publications at MarketingProfs and a long-time editor. Reach him via vahe@marketingprofs.com.

Twitter: @habesh

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  • by George Kane Mon Dec 2, 2013 via web

    I think Instagram has done a great job unveiling their advertising. I did not even realize it was an ad when I saw the MichaelKors advertisement. Instagram is already full of advertisements. People follow all sorts of products and people who are creating a brand image on instagram as users. I can't imagine that the new advertisements they put on the Instagram feed will be that much different than those people already see. If they could find a way to categorize people based on who they follow and give different people different ads, that would be icing on the cake.

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