By: Wallis Linker
March 2018
In 2012, the social media powerhouse Facebook purchased the marginally smaller social media app Instagram for $1 billion. Instagram began as a simple photo sharing app for friends to show their pictures to one another. It has since grown into an online community of photo sharing focusing on personal photos, creative art, niche categories (like ‘food porn’ or memes), and professional accounts. With Instagram’s nearly constant app updates (like adding “stories” to emulate rival Snapchat) it comes as no surprise that it is one of the most popular social media platforms worldwide. As of September 2017, Instagram reported 800 million monthly active accounts.
Instagram is a convenient way for a company to engage with a huge audience. For example, Nike (@nike) has 76 million followers, Kylie Cosmetics (@kyliecosmetics), of Kardashian infamy, has 15.5 million followers, and Chipotle (@chipotlemexicangrill) has 533 thousand. Instagram also has features such as “explore” and “suggested for you” that push an account’s photos onto the feeds of users who are not current followers. Instagram also has a feature where a user can look at every picture that was tagged at a certain location via ‘Geotagging.’ Even the ability to search hashtags allows a business to reach interested consumers. It is seemingly effortless to gain exposure through the app’s coding.
INSTAGRAM BASICS
The basic features of Instagram can improve the business presence of both startups and more established companies. For instance, Charity Water (@charitywater) is a non-profit that works to bring clean water to remote areas throughout the world, primarily in Africa. The Charity Water Instagram feed showcases crisp, focused photos highlighting clear water and provides summaries of success stories. Sharp, high definition photos reinforce the idea of cleanliness and drinkable water. Charity Water encourages its followers to contribute to the charity, through captions that tell individual stories, pulling at heartstrings, and which make available a link to their website. Similarly, clothing store Madewell (@madewell) has also achieved a strong brand aesthetic simply through their posted photos. Madewell gives off the sense of simple, yet trendy fashion choices for women. Its Instagram page shows this; photos of somewhat monochromatic outfits against a solid color background with the occasional nod to hipster trends (i.e. handwoven bowls, record players, succulents) populate its page.
INSTAGRAM BUSINESS TOOLS
Instagram, recognizing the demand for businesses to market and build a brand through its app, has added features facilitating its use by startups and entrepreneurs. In 2016, Instagram rolled out ‘Instagram Business Tools’ which are free to any business with a Facebook page. The most useful of the new tools is the ability to create a ‘Business Profile’ allowing a business to sync calls, texts, emails, and geographic locations through the app for all viewers. This profile option also gives the account owner access to “Insights.” Insights give business accounts information about who their followers are and which posts have the most views and “likes.” In utilizing Instagram’s “Business Tools,” businesses get a better sense of their viewer base and how to target their ideal consumer. Lastly, the profile allows a business to “promote,” letting the user turn a well-performing post into an ad within the app itself. The user can pick the audience to push the ad to or choose to have the app suggest targeting based on Instagram’s algorithm. This is a fantastic tool for a business with a tight advertising budget to only push already well-performing images as ads.
Outside of the parameters built into the app for businesses, many businesses choose to build a following and advertise through “influencers.” Influencer marketing, an ever-growing marketing tactic, is when a business pays or sends free goods to an individual who has a strong presence within a demographic, and whose public use or support of a product or group would result in third parties using or supporting that same product or group. A popular mechanism, especially amongst companies targeting Millennials or GenZ, influencer marketing can offer considerable rewards at little cost. This potential has been realized by many in the business world; in January 2018, Forbes created a checklist for companies interested in influencer marketing on Instagram and how to best plan for the desired results.
FEDERAL GUIDELINES FOR BUSINESS USE OF INSTAGRAM
However, boosting a brand via Instagram has limitations. The Federal Trade Commission, a government agency that regulates trade and commerce within the United States, has protocol regarding marketing. Relevant to Instagram advertising is Section 5(a) of the Federal Trade Commission Act (15 USC §45) which prohibits “unfair or deceptive acts or practices in or affecting commerce.” The FTC defines deceptive practices as an act or practice where:
(i) a representation, omission, or practice misleads or is likely to mislead a consumer;
(ii) a consumer’s interpretation of the representation, omission, or practice is considered reasonable under the circumstances; and
(iii) the misleading representation, omission, or practice is material
In can be unclear to a business what “unfair” or “deceptive” means in regard to its social media presence. In letters sent to Instagram users the FTC found violating this Act, the FTC noted:
if there is a ‘material connection’ between an endorser and the marketer of a product – in other words, a connection that might affect the weight or credibility that consumers give the endorsement – that connection should be clearly and conspicuously disclosed, unless the connection is already clear from the context of the communication containing the endorsement. Material connections could consist of a business or family relationship, monetary payment, or the provision of free products to the endorser.
The letters outlined common mistakes and recommendations on how to make a paid partnership more apparent to the average user:
Consumers should be able to notice the disclosure easily, and not have to look for it. For example, consumers viewing posts in their Instagram streams on mobile devices typically see only the first three lines of a longer post unless they click “more,” and many consumers may not click “more.” Therefore, you should disclose any material connection above the “more” button. In addition, where there are multiple tags, hashtags, or links, readers may just skip over them, especially where they appear at the end of a long post.
The hashtags referenced are the common usages of “#sp,” “#Thanks [Brand]” or “#partner.”
Thankfully, in June 2017, Instagram revealed a new feature that should make it easier for businesses unsure of FTC guidelines to continue promoting itself through partnerships. Instagram has added a “paid partnership with” sub-header on sponsored posts and stories in response to the FTC letters. This sub-header makes the business relationship at play sufficiently clear to a user. The update also gives Instagram the ability to easily track the performance of sponsored content and adapt the app to better suit its users, including the businesses engaged in promotional posts.
Instagram is a tool well suited for businesses; it can be used for advertising, promotion, and brand development. As an entrepreneur, Instagram should be used by entrepreneurs to grow brand presence and recognition. It is low cost and has the potential to allow a company to reach millions of people worldwide. But all good things come at a price; businesses must ensure they follow the FTC guidelines against unfair or deceptive posts in all paid partnerships and endorsements.