On Instagram, Straight Flexin’: Can App Executives Woo Advertisers?
In the Facebook (NASDAQ:FB) and Instagram world, Mark Zuckerberg is to Kevin Systrom as Sheryl Sandberg is to Emily White. Both power duos are working fervidly to continue Facebook’s monetary success and jumpstart Instagram’s — now, the only question is with whom and how soon?
According to The Wall Street Journal, the brains behind Instagram’s recent success story belong to 35-year-old White, the director of business operations for the smartphone app that works to “to capture and share the world’s moments.” Thus far, Instagram can be considered a success in terms of its user explosion: from 22 million last year to 150 million monthly active users now, but the site still has yet to make a dime off of its operations, and that’s what White is gearing up to change.
The Instagram queen is working to woo brand marketers and prime her app for advertising, but despite Instagram’s widespread appeal and growing popularity, the 50-person company still has some obstacles to overcome if it wants to start making money in the near future, and many of them involve keeping Instagram cool.
Instagram, created by Systrom in 2010 and acquired by Facebook in 2012, attracts a growing number of users interested in sharing their photos with an artsy filter. More and more young adult moment-capturers are flocking to the app, effectively augmenting longtime rival Twitter’s anxiety, but White and her team worry that the presence of ads could irk and alienate users, especially those after Instagram’s clean design and disinterested in Facebook and Twitter’s advertising.
Brian Wieser, an analyst at Pivotal Research Group, said to the Journal, ”Theoretically, [Instagram] could be making hundreds of millions of dollars today, but they would need a big sales force and they would risk polluting the environment.”
But Instagram eventually has to make money, and White says it will begin selling ads within the next year. Her goal now, according to the Journal, is to make those ads as inoffensive as possible and continue winning over users by not only maintaining Instagram’s “cool” status, but also even possibly upping it.
The other hurdle that Systrom, White, and the Instagram team have to cross is the future that advertisers present — how to appeal to them, how to prove their app is worthy of marketer content, and how to convince ad execs to spend money when Instagram has already previously given the service away for free.
The Wall Street Journal explains that some brands, including Nike (NYSE:NKE) and Lululemon Athletica (NASDAQ:LULU), are already running free campaigns on Instagram, and that’s why it is difficult for the app to become a true advertising platform and start charging. Instagram will need to prove to advertisers that the app can help facilitate their sales objectives and will effectively turn users back to their services.
It’s still unclear what these Instagram ads will look like and where they will fit in on Instagram’s design, but The Wall Street Journal suggests that they could eventually find a new home on the app’s Discover feature, where users are able to look up images or themes. In the future, users could click on pictures of products and be directed to the retailer’s own site, but plans are still very much in their nascent stages.
Luckily for White, she not only has a lot of experience — having worked first at Google (NASDAQ:GOOG) and then at Facebook — but she also has strong team backing with powerful Facebook mentors like Sandberg; David Fischer, vice president of business and marketing partnerships; and Carolyn Everson, vice president of global marketing.
White can learn from Facebook’s advertising mistakes and and stride to keep Instagram simple. With Systrom making the final calls and White courting the marketing brand executives, the social network is expecting great things out of the power duo, and it is confident that they can make Instagram’s billion-dollar acquisition worth every penny.