Last week, Instagram announced that beginning soon, “the order of photos and videos in your feed will be based on the likelihood you’ll be interested in the content, your relationship with the person posting and the timeliness of the post”. It doesn’t take a Harvard degree to realize that this is the next phase of Facebook’s plan to monetize their April 2012 acquisition. Facebook forked over $1 Billion for the photo-sharing app in it’s pre-revenue days and unfortunately it’s time for them to capitalize.
The first visible phase of Instagram’s revenue generation consisted of “sponsored” ads, which began on November 1, 2013. At first, the ads were few and far between. You could catch-up on an entire day and perhaps only see one ad. The “sponsored” ads have gradually picked up, but still tend to be minimally invasive and often very creative. If you ask me, bring on the ads, just don’t bury the accounts I choose to follow. If I didn’t want to see their posts, I’d unfollow the account. That’s unfortunately not what Instagram wants. Instead, they want each account’s number of followers to rise so that brands become increasingly more reliant on the application to reach their fan base. To encourage users to follow more accounts, they are attempting to prioritize your feed.
How does Instagram know what you’re interested in? How do they know your relationships or interest in the person or brand? With Facebook, you have linked “interests” and “relationships” in your profile. Businesses have separate pages versus individuals, which allow Facebook to easily decipher between the two. The only automated methods I can come up with to attempt a designation between individuals and businesses on Instagram are:
Each of these have pretty gaping holes, with the last being the most promising. Instead, I believe Instagram will simply begin prioritizing the accounts with which you engage the most (like or comment) on Instagram.
All the breweries, distributors, retailers and personalities in beer who spent a great deal of time, energy, and creativity building their brand and sharing their culture on Instagram are about to have the rug pulled out. Instagram has the potential to begin allowing accounts to “promote” their post and bypass the algorithm which would otherwise send their post to the abyss. If you are Stone and you lead the industry with 212K followers, what are you going to do if your next announcement is going to fall to the bottom of 70% of your followers’ feeds? You’re probably going to pay the piper, because the audience size is way too valuable not to.
The change could actually wind up being positive from the user’s standpoint. Seeing the accounts whose posts I “like” and comment on most at the top of my feed doesn’t sound like a bad deal, as long as the algorithm can avoid excessive repeats. Brands however will become challenged by the new newsfeed. On one hand, your most active and engaged fans will be significantly less likely to miss a post. You’ll get a free boost into their share of mind. However with studies showing plummeting engagement rates on Instagram, these engaged fans are becoming a smaller piece of the pie, despite a continuing rise in users and follower counts.
Potts shared his reaction to the change, “As a visual person I hate to see Instagram taking this approach. It seems counterintuitive to what they started as, a platform to easily share photo's with followers. I can only assume that this is a path to forcing brands to opt in to boosting posts, aka paying for promotion. Instagram was for me the most democratic and fair of all socials, and the one that had the least amount of soapboxing by followers. If they didn't like the content of your post, they wouldn't 'like' it- it was rare that people would get into large debates and give long winded opinions on why they disagree with everything you do.”
I can sympathize with breweries here, but I also feel that the Return On Investment is going to be there for most posts. Let’s say a taproom’s average customer has two beers and leaves with one 6-pack to-go. Not unreasonable, right? The brewery’s margin on that purchase is probably similar to the cost of boosting one post. If your breakeven point is obtaining 1-2 incremental customers for whatever it is you are promoting, that’s at least worth trying. This won’t make the pill any easier to swallow, but it’s why we’ll likely see small, medium and large breweries trying out the sponsored post.
Just because breweries give in and start forking over $10, $20, maybe $50 or $100 to boost posts doesn’t mean they won’t be searching for an alternative behind the scenes. Potts admitted that he didn’t have an alternative mapped out yet, but was very interested in a contingency plan. If you ask me, there are a few alternatives in the works:
While it’s a shame that this is about to happen to craft breweries, we would be ignorant to say that we didn’t see it coming. The change is going to force breweries to step up their creativity, both in the creation of better content and the means of getting it in front of their audiences.
Special thanks to Joey Potts, one of the most creative designers in the industry, for sharing 18th Street’s perspective on the changes.