Instagram and Its Effect on Consumers

Instagram now has over 500 million users. Over 40 billion photos have been shared on the platform since it launched in 2010. Every day, Instagram content gets a staggering 3.5 billion likes and 80 million shares. Considering that 60 percent of its users log in and scroll through their feeds daily — making it the second most engaged network after Facebook — Instagram is now an integral component of most brands’ social media marketing strategy.

Using Instagram for business can be highly effective. Currently, approximately half of all brands are active on Instagram, and that percentage is anticipated to rise to approximately 70 percent by the end of 2017. Brands that aren’t already on Instagram are likely missing a key social media marketing opportunity, as a full 50 percent of all Instagrammers use the platform to follow brands. A well-coordinated Instagram marketing strategy can actually have a significant impact on consumer behavior, driving engagement, improving brand recognition, and, ultimately, boosting sales. So, how exactly does Instagram affect consumers, and how can brands capitalize on those effects? Let’s take a look.

Instagram facilitates engagement.

Instagram can actually prompt a consumer to interact with a brand. The platform continuously drives engagement at higher rates than other social media platforms do, which makes Instagram marketing and advertising uniquely effective. Engagement with brands on Instagram is 10 times higher than it is on Facebook, 54 times higher than it is on Pinterest, and 84 times higher than it is on Twitter. More interaction translates to increased brand visibility and more purchases, which all adds up to an improved bottom line.

Beyond just posting photos to their accounts, brands can also do paid campaigns to advertise on Instagram and drive engagement. For example, French liqueur brand Cointreau was able to increase engagement with new customers. A recent campaign reached 150,000 people on Instagram and generated engagement at rates six times higher than on other platforms. Even when the content of ads and paid campaigns stays the same across platforms, Instagram consistently generates more engagement.

Instagram creates demand.

Research conducted by social psychologists has shown that Instagram creates “lifestyle envy.” Consumers are apt to compare themselves to their peers on social media platforms. Therefore, they will inevitably feel a pang or two of jealousy when they see a former classmate on an amazing safari vacation pop up in their newsfeed or when their best friend shows off a gorgeous new pair of Jimmy Choo heels. Instagram exacerbates this sensation, as it makes the accomplishments, experiences, and possessions of everyone in our social circle so much more visible to us.

“If you think about 100 years ago, people would go to the town dance and see what the Joneses are doing. This comparison has always been around,” explained Erin Wilson, a professional stage actress and singer as well as an adept Instagram user with over 40,000 followers. “Now you can do it on an extreme scale. You can compare yourself to thousands of people. Instagram makes our peers' lives look glamorous, but almost attainable. If Beyoncé has something, that's one thing, but if a friend does, it's almost in reach — or feels like it should be.” This phenomenon can create demand for a product, especially if a brand has a well-thought-out and well-resourced social media strategy on its side.

Instagram informs customers’ purchasing decisions.

One of the key ways in which Instagram affects consumers is by informing their purchasing decisions. It helps them decide what’s trendy and what isn’t, thereby informing where they should spend their money. This effect is particularly pronounced in the world of fashion. A full 97 percent of fashion brands are on Instagram. When it comes to social media in the fashion world, without a doubt, Instagram has the monopoly. According to a study conducted by the digital think tank L2 examining social media interaction during New York 2016 Fall Fashion Week, of the total 13 million interactions pertaining to fashion week, 97 percent took place on Instagram. Just 2 percent took place on Facebook, while a mere 1 percent took place on Twitter.

It should come as no surprise then that retailers are now turning to Instagram to ascertain what products will sell with customers and what products won’t. Because customers’ tastes and preferences are increasingly influenced by the content they consume on the social media platform, it makes sense for retailers to pay attention to what is trending — and what isn’t. “You have to be smarter about how to leverage what’s happening on the platform,” said Apu Gupta, CEO of visual commerce platform Curalate. “‘Trendspotting’ is a great start. Savvy retailers look at hashtags to understand street style and what’s cool right now. It’s not about your own products — it’s about gaining insight into what people are wearing and how they wear them.”

Major retailers, especially online retailers, are all using Instagram to figure out what will sell best to customers. “We look to social channels to inform demand, and Instagram is our first point of contact with the customer to figure out if a product is going to be a best-seller,” explained Natalie McGrath, vice president of marketing in the U.S. for fast-fashion e-commerce company Boohoo.com.

Instagram drives purchases.

Ultimately, Instagram works to boost consumers’ purchase intent and drive purchasing. For example, French men’s fashion app Menlook used Instagram to increase mobile app installs and boost sales by creating a special Instagram ad campaign full of rich and stylish photos. The campaign was a success and drove up purchasing rates. Overall, Menlook saw a 3.5 point increase on return-on-ad-spend (ROAS), meaning that a customer spent 3.5 times more after seeing the ad.

Moreover, Menlook isn’t a unique example. German brand Jägermeister saw similar success using Instagram ads to drive up purchasing. A series of animated images targeted to 18- to 28-year-olds drove a 5-point lift in purchase intent as well as an 8-point lift in brand perception for the brand. In other words, people purchased more and were more aware of the brand after the campaign. The bottom line is that excellent Instagram content, whether published directly on a brand’s account or in the form of a paid ad campaign, can and does drive sales. Proper social media management and a great Instagram strategy can and do boost a brand’s bottom line.

In conclusion, in today’s world, Instagram is much more than just a social media platform full of pretty pictures. It is a powerful force that is having a significant effect on consumers. Therefore, proper social media management on Instagram is key. Brands simply can’t afford not to capitalize on the way that Instagram affects consumers, from driving engagement to encouraging Instagram purchasing. A comprehensive Instagram marketing plan or advertising strategy is necessary to ensure you’re reaching your consumers on Instagram. If you don’t already have a strategy in place, now is the time to develop and implement one.

Need help with Instagram or other social media or content marketing strategy? 10twelve is here to help. Contact us to discuss your specific business needs.