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'Ads' Already Sneaking Their Way Onto Instagram

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During  Facebook 's second-quarter earnings call in July, CEO Mark Zuckerberg said that Instagram would feature ads "when the right time comes."

After last winter’s brouhaha over a change in Instagram’s terms of service (users objected to the possibility that their photos would be used in ads, and Instagram had to revert to its original terms), it seems the “right” time might never come. But actually, ads, of a sort, are already on the site — and, surprisingly, users seem to love them.

This summer, Mercedes-Benz USA commissioned five top Instagram photographers (about 500,000 followers each) to spend a week driving its newest entry-level luxury car, the CLA, which launches in September, and photograph their road trips. The Instagrammer with the most likes at the end of his or her spin in the car gets to keep it for three years. This first part of what was called the CLA Take the Wheel contest ends today, August 23rd, and soon, a user will also be selected to take and photograph a similar trip starting Sept. 5.

Mercedes isn't the only company to come up with a creative campaign that capitalizes on Instagram's unique qualities -- and puts the app's photographers to commercial use. Companies like Nike, Warby Parker, Converse, Toyota, and Ugg have also conducted campaigns with users. Corporate interest in working with the app's most popular photographers recently prompted a photo agency, Tinker Street, to create a department, Tinker Mobile, which represents 20 Instagrammers.

Chris Ozer's Photo at Twin Peaks during the CLA Take the Wheel campaign (Chris Ozer)

All this activity points to a possible future direction for ads on Instagram, for new innovations in advertising itself, as well as a way for Facebook to generate revenue from its mobile properties. (Disclosure: I own Facebook stock.)

“This is not a celeb endorsement, where you’re paying someone to use and just testify about a product. This is much more native or organic — where there’s a whole campaign about people using the product and using Instagram to catalog that. … [MBUSA is] bringing in a series of freelancers or contractors and tapping into some network effects here,” says Jed Williams, senior analyst of social media at BIA/Kelsey, a media research firm. “They’re bringing in those photographers’ entire communities and followings, and Mercedes-Benz is increasing its reach and virality and connections beyond hoping its [then] 18,000 fans share a bunch of stuff.”

Indeed, MBUSA began the campaign with 8,617 followers and has about 24,000 now. Williams, citing the three main types of advertising – paid, owned and earned – said that this campaign represents a new evolution in earned. “Paid” is a traditional ad that is purchased. “Owned” is, for instance, a company’s Facebook page — a property that they own but don’t pay for. “Earned” is activity generated around that owned material, such as likes, comments and shares.

“This is taking the paid, owned, earned model, and really focusing on the owned and earned and ramping that up to a new level,” he said.

That’s exactly how MBUSA saw it. “This is a great example of knowing that all messaging does not have be delivered by Mercedes-Benz on Mercedes-Benz ‘owned’ channels,” Mark Aikman, social media lead at MBUSA, said. The company conceived of the campaign as a way to sustain customer interest between the CLA’s initial introduction in a Super Bowl ad and its actual launch in September, and to attract a new demographic to the Mercedes-Benz brand.

“The stats on Instagram are just incredible,” he said. “Usage, consumption and engagement is even higher than on Twitter, so it seemed like the perfect platform to meet this new audience for the CLA,” he said. According to Aikman, the Instagram community tends to be a bit younger and similar to the entry-level luxury consumer MBUSA is targeting with the CLA.

When you multiply the number of photos of the campaign by the photographers’ followers, he said, it works out to a potential 90 million impressions. Plus, the audience gets the chance to like or comment, unlike with a traditional ad. So far, the campaign has garnered 1.5 million likes. (Instagram sees one billion likes on 45 million photos uploaded daily.)

Given the community’s sensitivity to commercial activity, the reaction has been surprisingly positive, which is good news for Facebook. Investor concern over the social media giant’s ability to monetize its mobile properties has depressed its share price since its May 2012 IPO. In late July, when Facebook announced strong second-quarter growth in mobile revenue, its stock price shot up, but a Mashable poll the same week showed that 47% of respondents said if ads came to Instagram, they would take their photos elsewhere.

With this backstory, one would expect, at best, a mixed reaction to the Take the Wheel campaign. But earlier that week, when it launched, many followers of the first contest photographer Tim Landis had positive things to say. While one wrote “#sellout” on the video announcing his participation in the campaign, it was one of only two negative sentiments out of about 250 total comments.

Part of the reason may be the unmediated nature of these “ads,” in contrast to a traditional marketing campaign, which is typically vetted by many players and levels of bureaucracy. “‘CLA Take the Wheel’ is more impromptu than your average marketing campaign,” Aikman said. “These Instagrammers are taking photos and publishing them in real-time. We did not know where their adventure would lead them or what the photos would be.”

This immediacy could be said to be true for pretty much all brands on Instagram, since they appear to be creating content via phone, the way any user would. Aikman said this gave the Instagram channel an advantage over traditional marketing, which he said is often ignored by millennials or “digital natives.”

This blurring of the lines between a traditional ad campaign and a photo for art’s sake was reflected in the experience of Chris Ozer, the CLA photographer who looks most likely to win the contest.

“Typically, there would be a shot list, and you’d have an art director on the shoot and the agency representatives and perhaps the client is even there,” he said. “For this, it was just me and my wife, who was my copilot for the shoot, and we had a ton of creative freedom. So the photos were released before the agency and the client even saw them. They saw them as they happened. I would say almost 100% of the time, that would not happen on a commercial shoot.”

This is not to say that it was entirely different from one, though. Beforehand, he, the agency and client discussed at length what style the photos should be.

“They hired us for our style, and they trusted that we could pull that off. And that’s what I mean by saying it’s very authentic. The photos were in line with what I would post if it were personal work. And I think that’s what they wanted,” he said. He acknowledged that some users posted negative comments, but said they do on his regular photos too.

The enthusiasm for this campaign, in addition to similar efforts on Instagram by brands like Johnny Walker, Lululemon, and Michael Kors, suggests a way for Instagram to introduce ads, and, by extension, for Facebook to make money from the app.

“Mark Zuckerberg at Facebook has been very consistent about wanting to build out the user experience and maintain and preserve that original experience,” said Williams of BIA/Kelsey, “but we’ve seen this with Facebook and Twitter: [A social media network] reaches this inevitable tipping point, or point of tension. You get this user base of a certain scale, and there is a real pressure to monetize the platform. Instagram is in the very nascent stages of beginning to test what that means and what that’s going to look like. How can they do that in a way that minimizes how much offense or friction is created for users, and maximize the revenue potential?”

It looks like answering this question won’t be as difficult as it once seemed.

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