Instagram launches overseas ads

Warc, 11 June 2014

SAN FRANCISCO: Instagram, the photo-sharing app, has announced plans to expand advertising outside the US for the first time, with users in the UK, Canada and Australia set to be targeted from later this year.

Since its acquisition by Facebook in 2012, Instagram has grown to 200m monthly active users and the great majority are based abroad, Adweek reported.

"It's a logical next step for Instagram to roll out advertising in these English-speaking countries, enabling global brand advertisers to extend their Instagram efforts outside the US," said Debra Aho Williamson, a social media analyst at eMarketer.

However, the company is taking a deliberately cautious approach, in much the same manner as when it launched advertising in the US last November.

This is because it wants ads that are engaging for users, who Instagram fears may reject the service if inappropriate or irrelevant ads disrupt their experience.

It worked with a select group of companies when developing advertising for its US base and has since expanded to about 20 firms, including Ben & Jerry's ice cream, Levi's, the apparel brand, and fast food chain Taco Bell.

"Instagram has purposely been cautious about rolling out ads in the US, so I expect similar cautious and calculated programmes in these countries," Williamson said.

But Instagram wants brands to use creative imagery to prevent users from switching off and plans to include an option to hide individual ads that users no longer want to see.

"We want someone to feel like they're flipping through their favourite glossy magazine," a Facebook representative told The Globe and Mail, which noted that Canadian Tire and Sport Chek are two Canadian firms that may get involved as they are already Facebook's most important advertising partners in the country.

Mark Mahaney, managing director of RBC Dominion Securities, said there is a potential risk of damaging user engagement if ads are rolled out too quickly, but he thought the initiative will work given Facebook's track record with advertising.

"I think they've proven that people are willing to tolerate and, sometimes more than that, embrace ads that are relevant, that aren't put too frequently within their conversational stream," he said.

In a recent paper for Warc, brands were advised that Instagram's focus on high-quality visuals and imagery made it a particularly suitable platform for high-end campaigns.

Data sourced from Adweek, The Globe and Mail; additional content by Warc staff