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One-Two Punch: How Facebook’s Instagram Integration Could Rock the Industry

Published: August 8, 2014

Author: Dave Yoo

Digital marketers are used to assimilating platform updates and advancements into their ad campaigns, but there could be a sea change on the horizon.
It’s been over two years since Facebook acquired Instagram, and the social giant has finally dropped a big clue about how it might integrate the photo-sharing platform. If a recent test proves to be a precursor to a bigger strategy to come, Facebook could position itself as a marketing ecosystem that will challenge everyone – Google, Twitter, etc. – to catch up.

Facebook + Instagram = 1 Self-Contained Funnel

According to John McDermott at Digiday, Instagram is conducting a test (yes, for now it’s just a test) with Mercedes-Benz that allows them to target Facebook users who previously saw one of its Instagram ads.  While this development is eye-opening in and of itself, as it gives hints into Facebook plans on returning their $1B investment, it also shows Facebook’s commitment to transforming how advertising not only can coexist with social media, but thrive and break into new levels of adoption.
What stands out the most to me is how inherent behavioral characteristics seen on both Facebook and Instagram are being aligned with their natural fit in the conversion funnel.  As noted by McDermott, Instagram’s product naturally promotes behavior more conducive to the top of the funnel, where brand awareness comes into play.  If Instagram is committed to preserving the user experience that allowed them to break 200 million users, it behooves them to preserve this characteristic of their product and not to “forcefully” incorporate more direct-response elements like call-to-action buttons, etc.
Luckily for them, they don’t need to when they can rely on their big brother, Facebook, where in-feed direct response ads not only have been successfully implemented (remember the days when the News Feed was considered sacrosanct?) but leverage tremendous audience targeting capabilities, which now potentially include highly-targeted Instagram users.  Yet another reason to migrate Instagram data to Facebook’s infrastructure?

What’s next for Facebook – and Twitter?

While the basic concept of targeting the same top-of-the-funnel users with direct-response advertising isn’t ground-breaking, the fact that it’s being done by the largest social media company in the industry in a synchronized fashion across two distinct products is.  This is where I feel Twitter will struggle to catch up since they are constrained to one product.  They have no choice but to incorporate all parts of the funnel into one ad unit (Website Cards) – with which, for what it’s worth, we’ve seen significant success for one of our clients.
While the burden is on Twitter to increase its user base and advertiser adoption, Facebook can allow Instagram to stay true to its photo-sharing/browsing roots and build an audience more conducive for brand advertisers while continuing to innovate performance-driven advertising products for a platform more suited for them.  In fact, I can imagine there might be a time when Facebook funnels all brand advertisers to Instagram first.
Could reverse data-sharing, for instance expanded lookalike audience targeting on Instagram based on Facebook data, be next? Given Facebook’s history of innovating ad products for social media, I wouldn’t bet against it.

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