Instagram Advertising 101 for eCommerce Marketers

Instagram is emerging as one of the most popular platforms for advertising among eCommerce businesses. Between 2013 and 2018, the number of monthly active users on Instagram has grown from 90 million to more than one billion.

Besides these staggering user growth numbers, one reason Instagram is so lucrative as an advertising platform is the high engagement rate. Studies show that 80% of Instagram users follow at least one business account. The average time spent on Instagram has been growing by 80% each year. Not surprisingly, Instagram has one of the highest ROI among social media platforms today.

As it is with any other channel, your advertising budget is just one of the many factors determining your success. Here are a few pointers to look at while advertising on Instagram.

Advertising Objectives

Ecommerce businesses typically use search engines to advertise their products. Search engine visitors are highly motivated and thus convert very well. Social media users however, are in more of an exploratory mood and are thus not very motivated. Your advertising strategy needs to be formulated once you have identified your objectives.

Growing Followers: Advertising costs money and it is not always a good idea to rely completely on ads for customer acquisition. An effective long term strategy would be to allocate budget to organically grow your followers, who may then be nurtured over time for conversion.

Branding: Instagram is a visual medium that provides marketers with the ideal platform to build a brand and enhance visibility.

Conversions: The success of any business is measured by its revenue. Once you have established a presence on Instagram and have grown your follower count, it is important to focus at least a part of your advertising budget on sales.

It is highly recommended that you distribute your advertising budget to meet all these different objectives. An eCommerce business that is just starting out on Instagram may look at allocating a higher budget for followers, while a store with reasonable following may focus on branding and conversions.

Instagram Algorithm

The objective of any social media advertising campaign must be to trigger engagement. Once you have gained initial traction, your reach increases organically through follower engagement. But for that to happen, it is important to understand how Instagram works.

The visibility of an Instagram post is determined by three factors: the follower’s personal interests based on machine learning, recency of a post, and past engagement with the poster. In other words, your posts get seen a lot more among followers who have engaged with your post in the past.

In order to maximize your advertising ROI, it is important to post your ads around the time your target audience is most active – so keep an eye on your Instagram analytics. Also, since future visibility is influenced by engagement, ads that instigate discussions and engagement tend to get better organic visibility through their ad campaigns.

Types of Instagram Advertising

Your advertising objectives can play a major role in influencing your content and ad formats. Let us take you through each of the three objectives mentioned earlier in this article and discuss the right advertising strategy in each of these cases.

Growing Followers

When you are just starting out on Instagram, your focus should be on connecting with your audience rather than converting them. This would mean running ads that appeal to their niche rather than promoting your business explicitly.

Take a look at this example from Instagram account LaughingBone that runs IHeartDogs, a site targeted at dog lovers.

You will notice that the caption does not contain the typical CTAs like ‘Buy Now’. Instead, it is an appeal to engage with the post.

Branding

There are several ways to build a brand through Instagram advertising. One way to do this is by showcasing your brand assets directly through ads. In this example below, a shaker cup seller demonstrates their product utility and branding in a single message.

You may also highlight your USPs (Unique Selling Proposition) through your ads. HTC promotes their smartphone in this example.

On the other hand, you have Garmin positioning their watches as one targeted at the fitness-conscious users in this ad.

It is worth pointing out that brand building on Instagram does not have to be necessarily done through their native advertising platform. You may also explore influencer marketing as a strategy. Here, you tie up with Instagram users who hold significant influence among your target audience and promote your products through their accounts. If you are short on budget, it is advisable to partner with targeted micro-influencers who have less than 5000 followers – not only do they charge lower, but the engagement rate on such accounts is generally much higher than what you observe on larger accounts.

Although influencer marketing is highly effective, this is a gray area since FTC regulations make it mandatory for publishers (that includes Instagram users) to disclose commercial relationships. Make sure that you check with an attorney to make sure that your ad campaigns are compliant with the law before executing a campaign.

Conversions

There are essentially two ways to convert Instagram users into customers with the help of Instagram ads. The most common way to do this is promoting your marketing assets and including a call to action on your caption.

In this example below, a toothbrush seller advertises their product in a pretty straightforward fashion.

This strategy attempts to build a brand as well as convert customers at the same time and may not always work. It’s an ideal strategy for eCommerce businesses that offer innovative products.

The second strategy is to advertise a discount promotion. It’s a useful strategy for online stores that sell popular brands or commodity products that viewers are already knowledgeable about.

In the example above, the targeted audience may already follow JustFab on Instagram or are aware of their offerings. A discount provides the much needed nudge for this target group to buy their products.

Instagram advertising is an extremely effective strategy to reach out to targeted prospects to make a sale or build your eCommerce brand. However, like any other form of advertising, it is important to track your metrics to make sure that you do not overrun your budget without meeting your objectives.

Image Credits

Feature Image: Unsplash / Erik Lcatero

All screenshots taken by author via Instagram, August 2018.