Instagram Memorandum PDF

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Instagram Business Memo, mandatory class assignment. Detailed work, final grade A-...

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Instagram Memorandum Date: 02/25/2019 From: Elizabeth Tsesarenko Subject: Social Media Memo: Instagram

Purpose The purpose of this memo is to provide the reader with insight on Instagram’s operating products and statistics, as well as cover their revenue model and include an analysis on the strengths and limitations of the social media platform. The memo will also include recommendations on how to better the app. Background Instagram was created in 2010 by co-founders Kevin Systrom and Mike Krieger. The free photo-sharing social media platform was meant to assist people in easily sharing their daily photographs, such as selfies and shots of food. The first version of the app named Burbn had a similar agenda, also including check-in location sharing and was unsuccessful. Instagram, however, hit a million users in the first three months. In 2012, it was bought by Facebook for $1 million, introducing a web page, tagged photos and videos in the following year. Instagram currently has over a billion users. Revenue Model According to Business of Apps, the 2018 revenue forecast for Instagram is estimated at around $7 billion. The monetization models of Facebook and Instagram are intertwined and similar in strategy. Instagram’s main source of revenue is advertisements. They come in several forms: 

Sponsored brand posts

Instagram allows businesses to promote their content by partnering up and creating “sponsored posts”. These posts pop up on all users’ pages in the scrolling feed. They include a button which takes the user to the business/influencer page or a link to shop the advertised product. 

Advertisements in Stories

Similar to sponsored posts in feeds, advertisements also appear in the form of promotional stories as the user is viewing other stories. The user is taken to the advertised page if they scroll up and decide to view more of the content. According to Hootsuite, 50% of businesses have utilized the Story feature.

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Facebook advertisements

Users are able to sell/promote their content on Instagram even if they do not have a profile. This is done through an advertisement section on Facebook, which takes the sponsored product to Instagram. However, Facebook has noticed a decline in their promotional revenue as opposed to Instagram. 

Carousel advertisements

Carousel advertisements are a series of photos or videos with a “scroll through” option that promote a brand/product and include a call to action. These advertisements are often tailed to what the user likes/views on the platform for a more personalized experience. According to Hootsuite, 72% of Instagram users have bought a product they saw on the platform. Products and Services 

Stories

Instagram added the feature Stories in August of 2016, allowing users to post photos and videos that expire after 24 hours. It is said to have been copied from Snapchat, which is a platform based on content that disappears after a day. In addition to the feature, Instagram added Face Filters, which allow users to try on different selfie lenses, such as puppy ears and more. According to the Odyssey, these lenses were originated by Looksery, an app launched in 2014 and later bought by Snapchat. The algorithm behind face filters takes into account facial proportions and ratios in order to create a smoother application. Moreover, Instagram continuously involves promotional activity in these filters, including influencer (Ariana Grande’s face) and event-based lenses. 

Live Video

Following the launch of Stories, Instagram introduced Live Videos in November of 2016. This feature allows users to start live transmitting on their stories, engaging with followers through comments and having the option of adding other people to their Live. Users have the option of either keeping the live on their stories for 24 hours or discarding it right after. This feature allows social media influencers to have a more approachable and personal relationship with their fan base. Live Video was also launched on Facebook, first available to celebrities for generation of engagement/interest and then released as a public feature. 

Direct Messages

Although Instagram is a highly public platform, Direct Messaging allows users to have private conversations. Introduced in 2013, the feature includes one-on-one conversations as well as group chats. A new addition to the service is photos and videos that disappear right after being 2

viewed, very similar to Snapchat. Along with that, users are able to voice call and video chat in the DMs. It serves as another form of iMessage or Messenger, expanding on iPhone’s and Facebook’s way of communicating. 

IGTV

Instagram TV or IGTV is one of the latest additions to the platform – an app within Instagram that allows users to share long (up to 60 minutes) videos on their accounts. With the 1-minute limit on an Instagram video post, this feature allows people who are interested in video blogging, fashion and others areas of influence to expand their content. IGTV includes a text box in which users can list the products they are advertising or simply engage with their audience. 

Discovery

The Discovery page, previously called Explore, is a page made up of content that is usually catered to your preferences, using data that you’ve previously viewed and liked as well as the most-liked posts in real time. It is one of the easiest ways to discover new accounts. The posts that end up on Discovery are usually the ones that generate high engagement and are therefore highly ranked. Apart from the personalized “For You” section, users can click on other categories, such as “Style”, “Music” and et cetera. This way of grouping content is very helpful to people looking for specific products or inspiration. The Discovery page also includes video channels, which are both automatically generated and personalized to a user’s account. All in all, the Discovery page 

Push Notifications (for chosen accounts)

Instagram launched a feature that users to get a notification whenever their chosen users post a photo, start a live video or add a story. This is very useful for fans that actively follow influencers and also assists in staying up to date due to the fact that the main feed is no longer chronological, therefore posts might get “lost”. 

Activity Status

One of the newest additions to Instagram is the Activity Status Tracker, which lets users see who is “online” by displaying a green circle next to the username. Instagram also included an option to turn the tracker off, therefore not displaying activity status to the user’s followers. This feature mirrors the one on Facebook, where online activity is displayed in a side bar and users are able to see when a person was last active. The Activity Status, along with the seen receipts on Direct Messages is the only way one can track someone’s activity on their account, since if a user has not liked a post there is no way to know if they saw it. The option to turn the tracker off gives Instagram users more control over their privacy.

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Business Accounts

An Instagram Business Account is most commonly used for businesses, products and services. It allows the user to include their or their brand’s contact information and gives them an insight into account analytics, such as the number of impressions, profile visits and other statistics. Having the business account feature helps business owners and influencers expand their businesses and sell their product more easily. According to SproutSocial, an estimated 71% of businesses use Instagram. SWOT Analysis Strengths The strengths of Instagram include in-app promotional/sponsor opportunities, through which brands and businesses are able to partner up with social media platform and generate revenue both ways. Being a free to download and register app, it is connected to other platforms such a Twitter and Facebook, supporting its worldwide reach. Instagram has targeted ads to create a personalized experience, which is both automatically generated and also monitored based on previously liked/viewed content, the ability to post both photo and video content and is mobile based in a time lead by smartphones. Weaknesses The web version of Instagram does not allow users to post and add stories, which would be a useful improvement. Along with that, the content posted from smartphones is of a significantly lower quality than the original. The 1-minute limit on videos is counteracted by the creation of IGTV, although the new feature is still not generating enough engagement from the users. Changing the feed to a non-chronological algorithm hides posts that do not have high activity from followers, resulting in less likes and views of the content. Instagram also seems to be flooded by bots, whose presence creates fake engagement statistics that provide false information for users. Opportunities Instagram allows users to partner with brands and businesses as a way to grow, generate revenue and do PR. Along with that, there is an opportunity to promote products through new services such as IGTV and carousel posts. This helps reach a wider audience through “calls to action” – links to websites and brands. The creation of Live Video allows social media influencers and celebrities to have a more personal connection with their fan base, as well as the ability to add users to their live streams. Threats

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One of the biggest threats for artists and content creators is copyright issues presented by Instagram in the form of users stealing content without giving credit. As well as that, with Instagram being a highly competitive platform, there is a constant threat of trend-chasing and repetitive content, which in turn “floods” the hashtags, making it difficult to find the needed information. In the recent years, as the idea of social media influencers takes over several platforms, every Instagram user considers themselves an influencer, in turn creating a difficult situation for users who rely on the job to generate income. Analysis Some of the goals of Instagram include establishing a platform that is widely accessible and allows easy personal blogging as well as the growth and expansion of brands. It is meant to create a safe space for personal branding, capture photographic experiences and have a wide international outreach/influence. Keeping the user base ever-expanding and growing could be achieved by improving old features and continuously introducing new ones and creating a network of different social media platforms that all interact with Instagram. Furthermore, continuing partnerships with brands and influencers and improving the delivery of sponsored content. When approaching these goals and objectives, it is important to focus on keeping Instagram users on the platform for longer periods of time by creating more of an individualized experience and promoting higher engagement with the app by introducing more features like live streaming and others. Along with that, making sure that posts with less comments and likes aren’t omitted from the feed/not seen by all followers. To further improve the user experience within the app, it might be helpful to make it easier to find needed content through hashtags, which are often overcrowded and difficult to sort through. Another essential factor would be the return to a chronological feed. Recommendations One of the ways to improve user experience on the platform would be to target the newly launched features such as IGTV. To attract more users to the feature, Instagram could partner up with macro social influencers and celebrities in order to create more interesting content. Similar to the way Facebook approached launching live streaming, Instagram did not create enough excitement around its newest product. Attracting more users to IGTV would increase the time they spend on the app. Another possible improvement would be a more advanced search bar, which would allow Instagrammers to search by first and last names along with the location and other personal information of the user they are attempting to find. Improving the web version of the app would include the ability to post content and stories from one’s computer, which would allow users that cannot access their phones to still be engaged 5

with the app. To add on to that, a higher quality of photos and longer videos would attract more users who greatly depend on the quality of their content, such as professional photographers and videographers. Without a chronological feed, it is harder for certain posts without high levels of engagement to be seen by all followers, therefore creating a certain hierarchy within the app. Reverting to the original idea of a chronological feed is a recommended improvement for Instagram. Finding a way to track and eliminate empty bot accounts would improve the quality of statistics and insights provided by Instagram. Summary Having covered the main features and products of Instagram as well as its revenue models and a SWOT analysis, it becomes clear that the app could use some improvements to prolong the time users spend on the app. Along those improvements is working on the web version of Instagram as well as looking into the algorithm of the posts that don’t make it to the newly restructured feed. Instagram, being a multi-billion social media platform has launched many successful features, including Stories, Live Video, IGTV and more. Continuing to create more quality content in collaboration with businesses and brands would benefit not only IGTV, but the revenue Instagram makes from its partnership programs. It is often the case that users scroll past sponsored posts without even noticing them, therefore working on the content itself instead of simply more strategies on how to promote it would improve the user experience. Although Instagram is mainly targeted at millennials, it is important to promote products and services that are aimed at people of all ages would be beneficial, supporting the idea behind Instagram being a platform where everyone gets a voice. SWOT Analysis

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Strengths In-app promotional/sponsored opportunities Free – no fee to download the app or register Connected to other platforms such as Facebook Ability to post both photo and video content Worldwide reach Targeted ads to create a personalized experience Expanding and growing user base Mobile-app based in a time lead by smartphones

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Weaknesses Web version not fully designed for comfortable use Limit to a 1-minute video Lowers photo and video quality after upload Not a fully developed search system Feed is not chronological Posts with little engagement often don’t appear to many people Privacy issues Mainly targets millennials

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Opportunities Partnerships with brands and businesses Growth/PR of business Promoting products through new services such as IGTV Personal experience through Live Video Wide audience outreach through links to websites and products

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Threats Copyright issues - people stealing photo/artwork without credit Hashtags too flooded – hard to find needed content The idea of social influencers threatened by everyone with an Instagram being considered an influencer Highly competitive Repetitive content

Works Cited https://sproutsocial.com/insights/instagram-stats/ https://www.theodysseyonline.com/people-behind-snapchats-selfie-lenses https://sproutsocial.com/insights/instagram-features/ https://blog.hootsuite.com/instagram-statistics/ https://www.feedough.com/how-does-instagram-make-money-instagram-revenue-model/

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