Instagram has a lot going for it right now: Millions of active advertisers, an opportunity to capitalize on commerce, impression growth, a love affair with DTC brands, the continued breakneck growth of Stories … and the fact that a lot of people still don’t necessarily associate it with Facebook.
The Facebook connection has been both a boon to Instagram – the two share resources and a powerful advertising system – and, to observers at least, somewhat of a bane.
It raised eyebrows when Instagram co-founders Kevin Systrom and Mike Krieger abruptly left the company in September 2018, and reports focused on clashes between the Instagram and Facebook leadership teams.
But there is a lot less drama in the day-to-day operations at Instagram, said Jim Squires, Instagram’s head of business who joined shortly after Facebook’s acquisition, following a four-year stint as a director of product marketing at the big blue app.
“The teams work so closely,” Squires said. “It’s so collaborative that you don’t see that [friction] internally.”
Squires would rather focus on the future, and the opportunities are vast, he said. Shopping and Stories are his two top priorities this year, and he’s equally bullish on both.
“For the business, that is definitely where we’re focused,” he said.
AdExchanger: You’ve been at Instagram for six years, but you spent a bunch of time at Facebook before that. What philosophy did you bring with you from the mothership?
JIM SQUIRES: The key initiative I led on the Facebook side was introducing ads and commercial content into news feed, back when everyone was moving from desktop to mobile, which feels like the dark ages now. But that was huge, and it took many years.
After the Instagram acquisition, I moved over to do a very similar thing for Instagram: how to think about advertising and commercial content, first in the Instagram feed – Stories didn’t exist at that time – and continuing to develop it from there. As we educate marketers and develop Stories as an ads platform, I see so many parallels to what we did with news feed originally.
But people engage with Stories content differently than feed content, and that impacts monetization. How do you accommodate for that?
With Stories, more people produce more content and move through that content even faster than through feed, because they’re tapping. Because they’re consuming more content, we have to think a little differently about the medium. We’ve been advising marketers since the beginning that they can’t sell like they do in 30-second television spots with a long story arc and the message at the very end. You’re not going to reach anybody if you do that. Think about those first couple of seconds.
What about ad prices on Instagram these days?
When we first launched Instagram Ads, there were fewer advertisers inside of Instagram and lower prices. I’m seeing similar pricing discounts for Stories now. CPMs are lower than feed CPMs, although that will change.
What’s the ad load on Instagram, and how much room is there to grow it?
There’s definitely headroom to increase ad load over time. We always approach this the same way: It’s people first, the experience they’re having on the platform, and then we focus on ways to make businesses and creators successful. If we focus on the first two, our business naturally flows with it.
Do you find that some marketers only want to buy on Instagram, rather than running automatic placements across all Facebook properties?
If brands just want to run on Instagram, they have the flexibility to do that, but if you’re clear on your business objective – and because of all the data available to the system – you’re likely going to get the highest ROI by running across all of the platforms together.
Let’s talk about commerce. How open are people to actually buying stuff on Instagram?
Shopping is a priority, and we’ve been investing in it for a couple of years. We’ve seen that people want to connect with businesses – 80% of people follow a business on Instagram. Often, they see products they like, and they want to explore, get more information or make a purchase. This just naturally happens as part of how people use Instagram.
Before we started investing in the shopping experience, you would have to jump through a lot of hoops to get more information. It was a link off to a website or you’d have to do a web search. So we started making it easier to tap and see product tags, pricing information and descriptions in feed and in Stories. We’ve also started introducing the ability to check out directly on Instagram, which makes it easier to save your credentials. There are various other features that could be introduced over time to make it even easier.
So many DTC brands get their start on Instagram, and they’re pouring money into ads, but what happens if/when that trend chills?
The DTC category includes a lot of different companies, including some brands that are starting to get big and companies like, for example, the one I met in Paris last year which is run by two women who sell cacti in beautiful pottery. They developed their entire business on Instagram. With just a couple of hundred dollars, you can start running ads and try out ideas. The tools are really easy to use and you can connect directly with your consumers. I think it’s an ongoing trend that we’ll continue to see.
Is there a status update you can share on Facebook’s push for more interoperability between platforms and what that means for advertisers?
A business wants to connect with people where they are, and they’re going to be using Messenger, Instagram Direct or some combination. Having a shared infrastructure or technology would make it really easy for marketers to get the most out of all of the Facebook properties, especially inside of messaging. We’ve done less on the business side with Direct to date, but we have started introducing more features for businesses to interact with customers.
This interview has been edited for clarity.