Instagram advertising is booming, and CPG brands are among the top spenders, according to a report from Brand Networks.
Industries like fashion and beauty seem like a natural fit for photo-centric Instagram. But in a category where packaging and image are often the biggest differentiators, it makes sense that the platform is seeing huge CPG ad growth, observers said.
Less is often more in the CPG category, where an intriguing image stands in for a relatively undifferentiated product.
"Instagram provides a simple canvas for consumers to dream on or fantasize about. It allows them to see a story in an image," says JR Little, global head of innovation at Carat.
CPG Instagram ads hark back to the pre-digital days, when a gorgeous product shot said it all.
"[Instagram advertising] is very congruent with the concept of advertising in glossy magazines: sexy, lush, desirable product, and results shots," says analyst and adviser Rebecca Lieb. "This isn't deep immersion, it isn't super interactivity, it's not an immersive experience. But how immersive do you need to get with peanut butter?"
Packaging is really important in the CPG category, acknowledges Kevin Purcer, EVP and creative integration director at Erwin Penland. He works on the Instagram account of almond-milk producer Califia Farms. More importantly, he says is that these products are woven into everyday life.
"Instagram is perhaps the best peek into someone else's life. These products are characters that recur in everyday format," he says. That’s the reason some of Califia Farms' best-performing content comes from fans of the brand, Purcer notes.
Another factor is important. "It's a sense of community that you can't achieve via just display. If you follow a brand on Instagram, you are joining a community of likeminded people and content," he adds.
Growth and value
Brand Networks CEO Jamie Tedford credits the opening of Instagram's APIs with the big rush. "This was probably the most anticipated opening of APIs in the industry that we've ever had," Tedford says. "What has driven a lot of adoption in each of the social platforms we serve is enabling developers to get access to buying programmatically. As soon as you make that buying process automated and self-serve, everything becomes more efficient. And it puts the marketer in the driver's seat."
More bells and whistles
Since the launch of its advertising program, Instagram has added 30-second videos, carousel ads, app installs, and website clicks, as well as "shop now" and "sign up" buttons. The company said a L’Occitane carousel ad campaign drove a 58% higher lift in conversions compared with their Instagram campaigns using single-photo link ads.
Video ads as a percent of total ads served by Brand Networks jumped from 9.54% in September to 22.52% in December.
Califia Farms used the video feature to create a "cinemagraph" in which a moving stream of almond milk flows into a static cup.
"Video adds a cool esthetic that brings your content to life," Purcer says.
What Instagram advertisers want next
Little notes that Instagram is lacking in emphasizing the importance of data-driven creative.
"The way we have been able to derive data insights has been very manual and requires working with other partners who can figure out, for example, which influencers have the biggest effect on purchase follow-through," he explains. "What Facebook needs to do is better link up the Instagram IDs with Facebook IDs."
Purcer wants the ability to put hyperlinks in posts, which would let Califia Farms provide store locators or link to online recipes. He'd also like to see social media managers be able to cycle through multiple accounts within the same interface.
As Instagram continues to build out capabilities, Brand Networks expects impressions served on key shopping dates such as Black Friday to nearly triple this year.
Meanwhile, Instagram is well-positioned to provide reach and awareness for CPG advertisers, Lieb says.
"Every once in a while, that light bulb goes off. Then, there is a workaday task of keeping in front of consumers, trying to remain in their minds and in their consideration," she says. "On Instagram, the brand just keeps going by in their feeds."
This story originally appeared on Campaign US.