Instagram Looks Even Better After Big Ad Deal With Omnicom Group

28Mar, 2014

Instagram is far from the largest social network – that would be Facebook, which purchased Instagram from its Bay Area-based founders for a cool $1 billion in 2012.

But the wildly popular and easily-implemented photo- and video-sharing app is certainly one of the “hottest” and fastest-rising social networks around. Then again, when you consider that it was snatched up by Facebook just 551 days after its launch, it’s safe to say that Instagram has always been hot.

Kevin Systrom with Mike Krieger in San Francisco.

Even so, things just keep getting hotter.

And the picture of Instagram as a dominant aspect of American life just keeps on developing.

According to the latest Social Summary report from GlobalWebIndex, Instagram boasted the largest growth rate of all social networks between the second and fourth quarters of 2013, spiking around 23% in usage.

And per Nielsen data, Instagram’s overall audience surged 66% in 2013, making it the fastest-growing app of the year. Some reports, including statements from Facebook insiders, claim that Instagram currently counts more than 150 million users.

Thanks to a recent deal with global advertising and marketing holding company Omnicom Group, Instagram’s overall exposure, audience and popularity stand poised to surge even wider and deeper. And one can imagine that the social network’s bottom line is also primed for an explosion.

As first reported by renowned advertising industry publication AdAge in early March, Omnicom Group (also known simply as Omnicom) has entered into a large-scale advertising pact with Instagram. Both partners confirmed that a deal had been struck, but declined to discuss details.

Nielsen-Top-App-Of-2013

AdAge first reported that the New York-based holding company was ready to spend up to $100 million on Instagram over the next year. Another source later told Social Daily that “the price tag is inaccurate,” but it’s hard to imagine that the amount won’t be something rather massive.

Afterall, Omnicom ranks as the world’s top corporate media services conglomerate, overseeing an international network of more than 1,500 agencies and providing services for more than 5,000 clients in 100-plus countries. That sprawling agency network includes BBDO, DDB Worldwide, TBWA Worldwide, Diversified Agency Services (DAS) and Omnicom Media Group (also known as OMG). And those agencies provide marketing and communications services in the fields of advertising, customer relationship management (CRM), strategic media planning and buying, interactive and digital marketing, direct and promotional marketing, public relations (PR) and other specialty communications.

Along with WPP, Interpublic and Publicis, Omnicom ranks as one of the “Big Four” agency companies in today’s ever-shifting advertising industry.

“Instagram will work closely with OMG’s creative agencies to develop best practices for content that inspires and engages the Instagram community,” a source close to the situation told MediaPost’s Social Media & Marketing Daily shortly after the deal had been made official. “Not a typical agency deal…this partnership extends beyond traditional media relationships.”

For its part, Instagram claimed the deal won’t change much about the platform that endeared it to so many users – or run any of those loyal or newer users off – but will instead only make the photo-swapping social media platform stronger.

“Our teams are going to work hand in hand to develop and execute campaigns that provide people with amazing imagery – and drive meaningful business results for advertisers,” Instagram Director of Market Operations Jim Squires said in a statement to AdAge.

“This doesn’t change our advertising strategy moving forward. People will continue to see a limited number of beautiful, high–quality photos and videos from select brands who already have a strong presence on Instagram.”

No matter how this all shakes out, it’s obviously a huge deal. Yes, AdAge estimates the overall value of the agreement at “up to $100 million,” but who knows what it will be worth to the surging social network before it’s all said and done? Only time will tell.

Of course, any kind of advertising is both new and news for Instagram, which has only been in the ad game in any capacity since late 2013. So far, so good, however. A recent Intelligence Report from L2 ThinkTank found that Instagram outshone other social media platforms in 2013, especially among prestige brands. Among other findings, the report discovered that a massive 93% of prestige brands are now present on Instagram – up a whopping 30% from 63% in July 2013.

In fact, a prestige brand, Michael Kors, was the first to advertise on Instagram, running a sponsored photo of a Michael Kors ladies watch displayed on a table, with a caption reading “Pampered in Paris.” Instagram users registered in the U.S. saw the ad…even if they weren’t actively “following” the Michael Kors brand page.

 

marc_jacobs_instagram-blog-third marc_jacobs_instagram1-blog-thirdFellow fashion brand Marc Jacobs is also white-hot on Instagram now, and now counts more than 1.1 million people in its Instagram community. During New York Fashion Week, Marc Jacobs used its Instagram feed to tease its various runway shows, and promote that they were also being live-streamed on MarcJacobs.com.

“Instagram has demonstrated more traction than any other platform in 2013, and it registered the strongest year-on-year growth among mobile apps,” L2 founder Scott Galloway explained in the L2 Intelligence Report. “It’s an obvious choice for consumer brands.”

Brands are also smitten by the high level of “engagement” that Instagram inherently commands among its users. L2’s data holds that the average Instagram user spends 257 minutes on the platform each month – or 4 hours and 17 minutes. On top of that, 57% of users interact daily on the platform, with 35% using Instagram more than once a day.

The L2 Intelligence Report also claimed that only around 16% of online adults with annual income exceeding $75,000 currently have an Instagram account, meaning there’s plenty of room for increased advertising success on the still-growing social network.

Even renowned publications Forbes.com and TheStreet.com have weighed in with stories on Instagram’s growth and development as of late.

What do YOU think about Instagram? Do you have an account on the social network – as an individual or a brand? Have you managed an Instagram account for a client? Do you see big potential for advertising success on the site?

Let us know your thoughts in the comments section below this blog post. We want to see what you think will develop with Instagram.

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