Chapter 1
Questions, Questions: Understanding the Why of Instagram
The history of Instagram reminds me of the quote:
If you want to make God laugh, tell him about your plans.
While the birth of Instagram was just a few years ago, in 2010, the idea for the photo app happened years before, and it happened because of a different project.
WHERE DID INSTAGRAM COME FROM ANYWAY?
Kevin Systrom and Mike Krieger are the official founders of Instagram. Systrom grew up in an upper-middle-class family in Massachusetts. According to rumors, he used to believe that getting rich quick through startups was something that happened to the other guy. (There was nothing quick about his story.)
Systrom left the East Coast to attend Stanford. After graduating, he wound up working for tech giants like Twitter and Google. Eventually, he started working in the marketing department of NextStop, which is a New York City subway directions app. At this time, Systrom decided to embark upon a new project featuring an app called Burbn. He intended for Burbn to become an HTML5-based merger of the online game Mafia Wars and Foursquareâs check-in service. During production, Burbn turned into Instagram (http://gramlike.com/the-history-of-instagram).
Thank goodness they changed the name.
After many iterations, the app was released in the fall of 2010. It went from a few users, which mainly included friends of Systrom and Krieger along with several early testers, to the number-one free photo app in only a few hours. By December of 2010, more than one million users had downloaded the program to their Apple devices.
Over the next two years, Instagram continued to grow, and the founders started to add features like hashtags, high-resolution photo support, one-click rotate, and new filters. In August of 2011, the 150 millionth photograph was uploaded to the app. A month later, Instagram had more than 10 million users, and at this time, the company was able to secure $7 million in Series A funding (http://thenextweb.com/magazine/2013/06/21/instagram-a-brief-history/#gref). This deal valued Instagram at around $25 million. (They are valued at $50 billion nowâscore!)
The Facebook Adoption
Since Instagram was initially set up as an iOS app, the program was available only through Appleâs platform until April of 2012. At that time, the company finally released a version for Android devices. After taking that step, Facebook jumped in and bought the company for $1 billion in cash and stock. The final purchase amount was less, though, because the social siteâs value took a hit on the stock market.
The deal received approval in August of 2012, but by December, the new owners ran into trouble with the app. The problem began when a change was made to the companyâs terms of service, giving Instagram the right to sell usersâ pictures to third parties without compensating them or providing a notification. Understandably, people werenât too happy about this, and the consumer backlash began. People even vowed that they would never use Instagram again. Due to the programâs current success, I suspect that a number of those people have now recanted.
You may recall, the backlash was enough to cause the company to retract the sections of its terms of service regarding the sharing of photos with third parties. Unfortunately to some degree, the companyâs reputation took a hit. This is just another example of the delicate balance between public, private, and social media networking.
Growing with Facebook
After Facebook purchased Instagram, the company introduced popular features like photo tagging and a âPhotos of Youâ option. It also extended photo tagging to include brands. This move gained the attention of companies that were looking to expand their social media presence and jump into organic advertising.
To become even more social, the company made it easier for users to share posts and videos through links and embed codes. This function lets you show content on Instagram in its original state. You can do this by just copying and pasting an embed link with a website or an article. This was a clever move by the company because it lets users share their content in other places while potentially reeling in new traffic.
The Facebook purchase also brought us natural-looking ads within Instagram. The social media giant claimed it wanted to use natural ads because Instagram users werenât used to seeing advertisements on the app. Facebook started slow with just a handful of high-quality photos presented by a few brands. This marketing approach proved to be successful since about 5 percent of the appâs users liked the ads. By incorporating marketing, Instagram gave businesses a new advertising platform to help them reach new consumers. The âwarmâ look of an effective Instagram ad from this time period continues to work today on not only Instagram but on Facebook as well.
By the end of 2013, Instagram added a private chat feature. With it, the appâs users can send private videos and photos to each other. Prior to the chat feature, the only way for people to communicate through Instagram was publicly through comments and likes. Today, users can send private content to as many as 15 people at a time on the companyâs network. Theyâre able to write captions for the images they are sharing, and after releasing a picture, they can have a conversation. With Facebook at the helm, the recent updates were strategic moves designed to increase the engagement levels of Instagram users and expand the siteâs traffic.
The Future of Instagram for Commerce
Social and mobile commerce are embracing Instagram in a big way. Not only is organic advertising a welcome form of marketing on the app, it also highly engages users, placing Instagram in the unique position of supporting social and mobile commerce.
Since mobile marketing is still ânewâ to many businesses (despite the fact that 87 percent of people have a mobile device, only 12 percent of businesses have any type of mobile marketing program), most companies are still trying to determine the best way to use it in their marketing strategies, and for retailers, Instagram has made it easier.
Instagram was one of the first networks to supply call-to-action tools for advertisers. They did this in the form of âInstall Nowâ or âShop Nowâ links. When it comes to commerce, Instagram offers intimacy and immediacy for both consumers and companies. These options are engaging more users.
Millennials are especially influenced by these kinds of call-to-action tools because they are seeing their friends and other influencers install or buy those items (while my age group, aka over 40, is more influenced by the ability to find our reading glassesâbut I digress). This, more than branded content, gives companies more credibility with millennials. These tools are transitioning Instagram from a marketing platform into a conduit for ecommerce, which decrease...