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In the continual search for new advertising revenue, Instagram has come up with a simple but profound new idea: create a hybrid of influencer marketing and sponsored content that will enable the social media platform to create an entirely new revenue stream. Brands will now be free to form new partnerships with influencers, in which all influencer content is repackaged as sponsored content that can be inserted into people’s Instagram feeds, whether they follow that influencer or not.
For Instagram, the move is brilliant: previously, the social media platform was unable to take a cut of all the influencer marketing dollars being spent by brands and ad agencies, but now Instagram will finally be able to cash in. The problem, however, is that Instagram users might soon start to resent the fact that they are being monetized, one way or another.
Hey, who’s that in my Instagram feed?
Perhaps the most controversial aspect of this new ad type is that your Instagram newsfeed could soon start to fill up with product placements and blatant brand promotions from influencers you never signed up to follow. Yes, there will be a small “Sponsored” or “Paid Partnership With” tagline or each of these posts, but the fact remain that due to the resemblance between this content and traditional branded content, you may soon grow to resent the fact that ads masquerading as real Instagram posts are showing up in your feed. (Instagram, however, is telling brands that performance will not suffer, as long as they fully attribute all branded content to the actual influencer.)
The end of organic reach on Instagram
Cynics, of course, will see the new hybrid influencer marketing-sponsored content ad model as proof of the end of organic reach on Instagram. In other words, brands are tired of being capped by the overall reach of a single influencer (which may number in just the tens of thousands), and are eager to expand their reach to millions of people. From a brand perspective, this makes sense, right? When you’re working with a micro-influencer, it can be hard to see the economic impact of getting the word out about your product to a relatively small audience. Presumably, a big brand like Coca-Cola would rather just pay for massive advertising reach than work with hundreds of small micro-influencers.
Killing the golden goose
The major distinction between Instagram and every other social media platform is its suitability for influencer marketing. What better way to sell a vacation at a beachfront hotel than to have a beautiful, bikini-clad beachgoer posting a photo of your hotel property on Instagram? That sense of visual storytelling is something that you just can’t capture with a banner ad. And the numbers tell the story – a clear majority (69%) of marketers prefer to spend their influencer marketing dollars on Instagram, with only 11% choosing YouTube, and only 5% choosing Facebook.
So what impact will this new advertising model have on Instagram? If influencer content starts to look just like regular sponsored content, what’s really the point of advertising on Instagram? You could spend your advertising dollars better elsewhere. And if people are ignoring random sponsored posts for products they have no intention of ever buying, isn’t this just a gigantic reallocation of marketing dollars from deep-pocketed brands to advertising-hungry Instagram?
The end result might be Instagram killing the golden goose that made it such a social media phenomenon. If Instagram is seen as just greedily cashing in on influencer marketing, and transforming everyone’s artfully curated feeds into just giant billboards for random products, get ready to read plenty of new media stories about the top-tier influencers headed somewhere else on the social web.