Facebook announced Wednesday that it has expanded Instagram's commercial activity to more than 30 additional countries, including Israel.
Meanwhile, Instagram reported that its network had 1.6 million active users per month in Israel, with close to a million daily users who upload pictures, reply to their friends, or simply flick through their feed.
That massive audience, starting today, will be exposed to an avalanche of advertisements, which will slowly seep into their timeline.
The five Israeli advertisers that won the rights to be the first commercial publishers on Instagram are Coca Cola, Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ), Strauss Group Ltd. (TASE:STRS), Procter & Gamble, and Adika, a fashion house from Golf & Co. (TASE:GOLF). Their sponsored content will make its way to users feed from today in an initial pilot program.
At the end of the month, the first five will be joined by hundreds of Israeli companies when the advertising platform is launched, meaning any business -- big or small -- could launch marketing campaigns on Instagram.
Those familiar with Facebook advertising will be happy to hear that the campaign management for Instagram ads will be run directly through Facebook's ad manager; social media managers will be able to publish and monitor campaigns on both social networks simultaneously.
However, not all of the 1.6 million active users will see the ads initially. Instagram officials explained that at first only Instagram users that opened their account through Facebook will see the ads - but were quick to clarify that the demographic includes most users.
As such, advertisers will be able to target their campaigns on specific demographics based on a variety of characteristics - like on Facebook - including ethnicity, age, place of residence, and marital status.
At the beginning of the week, Facebook held an event in Tel Aviv for its Israeli clients that was the first of its kind. During the event, Facebook Israel employees - including VP for Israeli clients Eli Uzan -- explained the new advertising platform alongside Alastair Cotterill, Instagram's creative strategist for Europe, the Middle East, and Africa.
Advertisers will be offered three types of ads: a standard picture ad which includes a link to an external site; a 30-second video ad (as opposed to the 15 seconds allowed private users); and an ad for installing an application, similar to those already seen on Facebook.
Facebook Israel noted that the ads will appear in the desktop version, which only allows for following a feed and searching accounts.
Cotterill told "Globes" today, "Instagram's audience differs from Facebook or other places. It's a very connected audience and people return to it again and again to see things that inspire them. There is no single solution for how to advertise on Instagram; you need to understand your audience and know how you want to tell your story."
Uzan added: "Instagram will insert relatively few ads and users will be allowed to say whether the ads are relevant to them, like we do on Facebook."
A recent Merrill Lynch study estimated that Instagram would finish the year with $112 million in revenue, mostly from advertising.
In 2017, it is expected to near the billion mark with $910 million per year - and double that the following year. By 2020, Merrill Lynch's researchers believe that Instagram will reach revenue of $3.8 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on September 9, 2015
© Copyright of Globes Publisher Itonut (1983) Ltd. 2015