

Instagram as a Growing Business - hornokplease
http://blog.instagram.com/post/63017560810/instagramasagrowingbusiness

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iambateman
There is _no_ problem with a service monetizing. It's a great day when a
service like Instagram is finally sustainable and relies on customers, not
VCs.

But they had three years to think about monetization, and the BEST plan they
came up with was advertising. Not freemium, or selling products, or any other
business model.

Advertising.

TV advertising "started out slow" too. Now it's 1/3 of the viewing experience.
With ads, you never, ever, get fewer ads. It's always more. More annoying,
more intrusive, on a good day just more "targeted."

Of course, we've seen ads coming to instagram for years. The good people at
Facebook somehow managed to reinvent the way everyone interacts, but can't
find a way to make money directly from the people who use their service.

TL;DR...Monetizing isn't bad. But advertising is unimaginative.

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nasalgoat
I'm genuinely interested in alternatives to advertizing - what would you
suggest?

~~~
Nicholas_C
This is definitely the largest problem for social media companies in my mind.
No matter what they do to generate revenue they will be vilified by the
average user. Nobody wants to pay for anything so the natural course of action
is to use ads, then everyone complains about ads and leaves or uses the
service less. The other course of action is to sell data about users, but that
will piss off users even worse.

One alternative I can think of that would not drive away users would be to
charge the largest companies that use the services to promote their products.
Perhaps charge Oreo for the right to make posts to their social media account
on Facebook or Instagram.

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andrewljohnson
_Our aim is to make any advertisements you see feel as natural to Instagram as
the photos and videos many of you already enjoy from your favorite brands._

Their _stated_ goal should be despised and pariahed, and yet they are proud.
This is the problem with Google, Facebook, and now Instagram. There is
absolutely no separation of content from ads, and they do exactly as much as
law will permit.

I've been deeply disappointed in all of the spam coming out of Google these
days - they flood inboxes with spam from Google Play and other services, and
it's a travesty for the brand. It's a little funny to watch the GMail team
fighting the spam hydra, within Google itself.

~~~
resu_nimda
> There is absolutely no separation of content from ads, and they do exactly
> as much as law will permit.

That's one perspective, that it's manipulative to mix the ads in with the
content.

But from another perspective, they're trying to raise the quality of the ad
"experience." One of the main reasons internet ads are so annoying is because
most of them are irritating eyesores that are irrelevant to my life. On
Facebook, though, I sometimes gain useful information from ads about local
events and things I'm interested in. And the ads bother me less because they
stick out less, while still being clearly identifiable.

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atacrawl
_We’ll also make sure you have control. If you see an ad you don’t like,
you’ll be able to hide it and provide feedback about what didn’t feel right._

You can control what you see... by seeing it first. On what planet is that
considered "control?"

~~~
bluetidepro
Also, I imagine they will just use a similar ad system (and UX) that Facebook
currently uses (if not the same) since they are all under the same umbrella
now. And if that's the case, exactly what you said, that is not "control".

~~~
dkl
For some reason the FB adds, on my feed, are very sexually suggestive.
Somehow, seeing cleavage next to pics of family... seems very creepy to me. I
really hate it.

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mmagin
"the photos and videos many of you already enjoy from your favorite brands."

I do? Last I checked they were people, not brands that I was following.

It disappoints me that micropayments are such a dead idea. I like paying for
things I actually use a lot better than the cognitive pollution of
advertising.

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EvanL
Eh, kind of Wack.

I would've liked to see something creative more along the lines of enhanced
functionality for brands to reach their current followers. Maybe specialized
"Grab Deal" buttons.

Anything but TV commercials.

May god have mercy on their souls if they attempt some kind of youtube style
locked video ad model.

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sharkweek
I get it, we're getting a free service and they need to make money at some
point -- but judging how horrible the Facebook news feed has become, my hopes
aren't exactly high for this next move.

I suppose the one potential saving grace here is that it might encourage
creative content from brands, as that will typically be the most rewarded. I'm
quite impressed by what some brands have been able to accomplish with Vine.

~~~
RandallBrown
How bad is your Facebook news feed?

I get 1 suggested post for every page of statuses. (So if I scroll to the
bottom to load new posts, I get 1 more suggested post)

These are all somewhat relevant ads to me. One is for a dentist in my area,
one is for a keychain cell phone charger, one is for instagram, and one is a
company looking for IT jobs (which makes sense, since I'm a developer).

There's the regular ads on the side, but those have been there for years and
remain as relevant as the posts in my newsfeed. I've even clicked one of those
ads and bought something.

I'm just curious, because my experience with facebook ads is actually quite
good. Maybe this is because my profile is somewhat more open than many so they
can mine more data from it and I don't go around "liking" things that I don't
actually want to get updates from.

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greyman
I personally frown upon the ads inserted into the news stream, and I found
them even more intrusive when they try to "blend" with native posts. But of
course it's their right to insert them there. But what I don't like even more
is that all those big players seems to not want to introduce paid no-ads
accounts - maybe they wouldn't like to extra responsibility of having the
paying customers.

~~~
dm8
Out of curiosity, why do you feel them 'intrusive'?

Don't you think they are better since you can completely ignore them by
scrolling down rather than taking you hostage to watch 30 second video or
interstitial?

~~~
kingnight
It removes the intimacy of your feed. Some people may follow brands, but
others follow their friends and photographers whom they admire. Interjecting
'tailored content' will degrade the connection people have with the feed they
subscribe to.

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skycocker
"Instagram as a Growing Business", aka how to make your users believe ads are
a feature provided for them.

~~~
bluetidepro
While obviously everyone hates ads, you have to give them credit for doing a
nice job at bending this in their favor. It's a very smart tactic/approach
they are using to introduce ads to the users feed.

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hojoff79
The title of this article should read "Instagram is now a business". Seems
like adding non-seamless adds for this platform is not the best way to utilize
the product they have. In my opinion, they should be driving more seamless
integration with their apps that do generate revenue and use this as a
property to prop those up. That's really why they bought this thing, to keep
mobile pictures in Facebook's realm. They should drive more integration
towards that goal. They certainly did not buy it because they thought it would
generate revenue and profit eventually to provide a good return on the
invested capital, so why try to utilize it like that?

~~~
untilHellbanned
typical euphemism hell business speak, thanks Instagram you really care, not
like those other guys!

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elwell
Why do they say "we'll start slow"? Doesn't seem necessary for them to tell
the public that, and it's only concerning.

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fnbaptiste
It was just a matter of time before they started putting ads into the stream,
so I can't really say I'm disappointed. But when they talk about making ads
seem "natural" to the Instagram feed, it reminds me of debate over the ethical
implications that come with blurring the lines between advertising and
content.

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vegasje
Yet another business that took the approach of "customer adoption first,
actual business model second." It's so frustrating to see this play out time
and time again.

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immy
I am surprised Instagram beat Tumblr to it

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anderspetersson
It's time to monetize!

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wellboy
Advertising is always the most desperate business model when you don´t have
any other ways to monetize. However, that's the problem if you are a generic
startup for everybody and don't have a niche.

~~~
segmondy
tell that to google.

~~~
wellboy
Well they have improved their model, they make quite a lot of money now
through the app store, Android, soon self-driving cars etc.

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untilHellbanned
half-naked selfies as ads seems like the most "natural" ad.

no seriously, will be interesting to track GoDaddy and other brands whose ad
wheelhouse is the tried-and-true "sex sells"...

here's to hoping its more Vogue-style ad pages rather than the sleazy/spammy
display ads that tend to overwhelm the internet, not super optimistic of the
former considering their parents', FB (like Myspace before it), bottom feeder
trajectory.

~~~
kingnight
You must be very familiar with the 'Explore' tab...

