Why Facebook Bought Instagram: 3 Factors
The Facebook-Instagram deal made some noise last week, which suggests that the acquisition will create repercussions for the social network this year. Facebook is aware that Instagram is an imminent threat to their Timeline feature, aside from that, Instagram has finally landed an Android app. The purchase was not a surprise at all, with Facebook hiring former Google employees to ramp up their search capabilities, it makes sense that they’ll be focusing on enhancing visual engagement to improve their ad revenue.
Image via Niemanlab
Facebook has over $850 million users in tow, so why does Facebook even bought Instagram. Here are a few points to consider:
1.) Mobile Ad Revenue
When Facebook acquires a visual platform like Instagram, it doesn’t only acquire more users, it brings the service to their fold as well. Instagram was actually drawing users from Facebook through its app. So instead of competing with an already successful mobile approach that Instagram has, Facebook did a sensible thing to purchase Instagram. Facebook might be raking tons of dollars on desktop ad revenues but mobile internet usage is increasing every year. Facebook mobile isn’t really good with mobile ROI, Instagram has established itself already. Facebook has the nails; Instagram has the hammer.
2.) Sentiment Analytics
Facebook has been launching tools and functions that an ordinary user doesn’t care about: The ticker, the Timeline format, and People Talking About metrics. But to brands and businesses, it’s an opportunity for to devise fresh B2C strategies. Facebook wants brands to think like publishers, so when they come up with People Talking About metric, brands should urge users to share visual content for them to get mentions and increase awareness. With user-generated content, brands are hitting two birds with one stone – user engagement and increased brand awareness.
3.) Social E-Commerce
Reality checked: mobile monetization is one crucial area to consider for social platforms. Gartner predicted that by 2014, almost 3 billion of the world’s adult population will transact via mobile or any online method. Instagram’s Android app makes the service mainstream which is an obvious threat to Facebook. Yes, you can access Facebook on your mobile, but what Facebook wants is to devise a way for businesses to profit from mobile ads. Words are cheap when you sell something, brands are ditching the salesman approach. As a visual platform, Instagram paves the way for user engagement through photos, and when you create a conversation using images it could lead to a purchase. This is already happening on Pinterest, it's a no-brainer if Facebook comes up with a better approach using Instagram.
It’ll be interesting how Facebook will monetize the service (and spoil it as well). Facebook bought Instagram along with its users. That’s the crucial keyword “users” they’re just users because Instagram is consumer technology per se (in layman’s term it’s free).
Here’s the challenge that awaits Facebook – turning users into customers.
"Mac here. I used to be a shy boy but social media changed it all. I handle social media campaigns and manage social CRM for clients."
Mac Ocampo recently handled social media campaigns and manages social CRM at Media Mash (Formerly Peachtree SEO), a division of IVI Technologies. Media Mash is a full-service internet marketing firm delivering local search and social media solutions for ...