Instagram gets serious about mobile ads – expands formats and targeting

Instagram, the popular mobile photo app, yesterday announced the launch of additional advertising features for businesses of all sizes. In addition to announcing new ad formats, the company also plans to expand its targeting features.
Instagram users are likely to see a lot more ads in their feeds
Having previously trialled its carousel ads in March this year, Instagram is now ready to roll out direct response advertising. This means that users will be prompted to purchase a product or engage in another action such as “Install Now” or “Sign Up”. Instagram will generate ad dollars when users follow the action and click on the button. In order to make the ad experience more relevant for marketers, targeting is based on user interest, age, location and demographics, gender, but it also incorporates your Facebook’s behavioural ad profile. In addition, brands will be able to purchase Instagram ads directly from Facebook.
Debra Aho Williamson, Principal Analyst, eMarketer says:

“These updates completely change the character and nature of Instagram advertising. New ways to target and an API are both things that advertisers have been asking for for a long time.”

With over 300m users, spending an average 21 minutes per day using the app, Instagram offers good opportunities for advertisers. And indeed, the company previously measured 475 campaigns through Nielsen Brand Effect, and discovered that ad recall from sponsored posts on Instagram was 300% higher than Nielsen’s norms for online advertising. Facebook’s mobile ad revenue, including Instagram, rose rapidly last year, totaling $7.4bn in 2014 up 135.7% from 2013. This accounts for 17.4% of the global mobile ad market, placing Facebook second to Google says eMarketer.
But there is still room to grow. 27.6% of the US population will be using Instagram this year with the most popular age group between 25 to 34 years. Whilst photos are still the preferred format for ads among 94% of marketers, video is catching up (6%), finds eMarketer.