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Entrepreneurship

How Important Is Instagram For Marketing?

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A few years ago, blogs and industry pubs were full of hopeful predictions of how Facebook and Twitter would usher in a new age of cost-free or low-cost marketing. Brands would “authentically” earn attention, and friends would see each other’s likes and retweets, creating viral success for brands.

Fast forward to today, and marketers are struggling to figure out the value of their Facebook pages as engagement drops, and some are opting out of Facebook altogether, Meanwhile, the interaction rate with brand tweets stands at 0.07%, which is less than the current click rates for banner ads.

So, what have we learned from the brand marketing experiences on Facebook and Twitter?

Have marketers realized that in social channels controlled by consumers, brand messaging is so much less welcome than content from friends and family that it is impossible for most companies to earn attention, acquire new customers or generate marketing ROI?

Have we realized that, just like on the Web (where Adblocker is the most popular Chrome download) and on TV (where almost half of millennials now timeshift to improve convenience and skip ads), consumers in social media will ignore or actively reject most brand messaging?

Or maybe we have concluded that while it is possible to get consumers to click a “like” button in exchange for a discount, this cannot create a new brand relationship if over 90% of consumers do not agree it is fair for companies to collect information about them without their knowledge in exchange for a discount.

Is that what we have learned?

It does not seem so. The lesson marketers seem to have gleaned from the past few years is that something is wrong with Facebook and Twitter–they are boring and black-and-white–so let’s instead shift our attention to the Technicolor world of Instagram! In the last couple of months, my email box and feeds have been full of hype for Instagram, and the justifications are exactly the same as they were for Facebook and Twitter back in 2010.

For example, “Why Your Business Needs an Instagram Account in 2015” contains no business justification whatsoever. The reason your business “needs” Instagram, the author argues, is because “Instagram is exploding,” you can “get creative” and “show people what you do behind the scenes, not just what you’re selling.” Does any of this sound familiar to you? Remember in 2010 when Facebook was “exploding,” brands could use it to “get creative” and the key to success was to “be human”?

In “A Three Step Guide to Winning at Instagram,” the author never once suggests how to convert pretty pictures and likes into business wins (particularly on a social network that does not permit links within posts). Instead, it offers the same tired advice brands got about pictures on Facebook and Twitter: Image quality is everything; Consistency is key; Photography is aspirational. If those tips did not work in Facebook and Twitter, what would lead us to believe it will be any different on Instagram?

One analyst firm promoted its Instagram 2015 report by noting the social network offers “100 percent organic reach,” unlike Facebook, “which inserted a paywall between brands and their communities.” First, Instagram handles followers in the same way as Twitter, offering no filter or algorithm for the people following the brand, so there is no reason to think brands will not suffer the same fate on Instagram as on Twitter. Second, as we have learned on Twitter, there is no such thing as “100 percent organic reach”–the vast majority of posts on Twitter and Instagram are not seen by followers because they are ephemeral, disappearing rapidly in feeds that are not monitored 24/7. And lastly, what do we expect will happen as brand presence grows on Instagram, consumers become increasingly tired of brand content and Instagram improves and expands its pay offerings? Put simply, Instagram 2017 will look a lot like Twitter 2015–decreasing organic engagement, increasing costs for paid media and disappointed brands.

Will some brands succeed on Instagram? Sure, just as some have succeeded in Facebook or Twitter, but this has been the exception and not the rule, as there is little evidence brands are delivering marketing success on a widespread basis. Despite billions of dollars spent on content strategies, social media management platforms and engagement-building campaigns, the percentage of online sales attributable to social media in 2015 stands at a mere 1%, one point less than it was last year and more than 90% less than acquisition from email, CPC or affiliate sources.

Some will argue, as they did on last night’s Beancast, that this sort of click-attribution is a poor measure of social value, and I would agree–if brands were earning significant levels of engagement. But in a world where Facebook Organic Zero is approaching and Twitter engagement is less than banner ads’, what reason do we have to believe there are broad and unmeasured benefits in a channel where so few people see and engage with brands? (Case in point: As I type this, the past week’s posts for McDonald’s, which has 57 million fans on Facebook, each have earned fewer than 500 likes and 35 shares–one of the largest brands on Facebook is engaging 25% fewer people with each post than walk into a single of the company’s 35,000 restaurant locations in an average day.)

As I have argued in the past, there is undoubtedly value in social for a select few brands in the right verticals or that have built the right customer relationships through actions, products and services, but too many brands are struggling to make themselves appealing and engaging on social networks when they have failed to do so in the real world. Distrusted brands with weak customer relationships that try to be interesting on Instagram will be like Oz frantically pulling levers to create distracting visual effects while demanding, “Pay no attention to that man behind the curtain!”

Pay no attention to that brand, er,
I mean man behind the curtain!

The signs are not difficult to read, and the future is not hard to see. We are a decade or more into the social era, and we know how it works. Instagram is sufficiently similar to Facebook and Twitter that expecting a different outcome is, as the saying goes, the definition of insanity.

Social media is a powerful platform for consumers. It can also be powerful for brands that unleash Word of Mouth and earn true advocacy with their products and services. But we now have too many years of social media experience to think that attractive pictures on Instagram will deliver marketing results outside of select niches. Heck, even some in the fashion industry, which recently honored Instagram’s founder with an award, are beginning to question the impact of Instagram (and if hot models and stylish clothes snapped by the world’s most experienced photographers may not deliver business results for style brands, what do you think your social team will accomplish?)

You want your brand to succeed in Instagram? Put down the camera and give your customers experiences they will want to capture and share. Or you can try to make your brand fascinating and creative in Instagram, but just remember–even the great and powerful Oz was smart enough to know he would eventually be discovered and keep an escape balloon at the ready.

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About the Author

This article was written by Augie Ray of ExperienceTheBlog.com. Angie is the Director of Global Voice of Customer Strategy for a Fortune 100 financial service company. His background includes more than 20 years of experience in digital, brand, customer experience and social business. See more of his work.

Entrepreneurship

What Kills A Startup

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1 – Being inflexible and not actively seeking or using customer feedback

Ignoring your users is a tried and true way to fail. Yes that sounds obvious but this was the #1 reason given for failure amongst the 32 startup failure post-mortems we analyzed. Tunnel vision and not gathering user feedback are fatal flaws for most startups. For instance, ecrowds, a web content management system company, said that “ We spent way too much time building it for ourselves and not getting feedback from prospects — it’s easy to get tunnel vision. I’d recommend not going more than two or three months from the initial start to getting in the hands of prospects that are truly objective.”

2 – Building a solution looking for a problem, i.e., not targeting a “market need”

Choosing to tackle problems that are interesting to solve rather than those that serve a market need was often cited as a reason for failure. Sure, you can build an app and see if it will stick, but knowing there is a market need upfront is a good thing. “Companies should tackle market problems not technical problems” according to the BricaBox founder. One of the main reasons BricaBox failed was because it was solving a technical problem. The founder states that, “While it’s good to scratch itches, it’s best to scratch those you share with the greater market. If you want to solve a technical problem, get a group together and do it as open source.”

3 – Not the right team

A diverse team with different skill sets was often cited as being critical to the success of a starti[ company. Failure post-mortems often lamented that “I wish we had a CTO from the start, or wished that the startup had “a founder that loved the business aspect of things”. In some cases, the founding team wished they had more checks and balances. As Nouncers founder stated, “This brings me back to the underlying problem I didn’t have a partner to balance me out and provide sanity checks for business and technology decisions made.” Wesabe founder also stated that he was the sole and quite stubborn decision maker for much of the enterprises life, and therefore he can blame no one but himself for the failures of Wesabe. Team deficiencies were given as a reason for startup failure almost 1/3 of the time.

4 – Poor Marketing

Knowing your target audience and knowing how to get their attention and convert them to leads and ultimately customers is one of the most important skills of a successful business. Yet, in almost 30% of failures, ineffective marketing was a primary cause of failure. Oftentimes, the inability to market was a function of founders who liked to code or build product but who didn’t relish the idea of promoting the product. The folks at Devver highlighted the need to find someone who enjoys creating and finding distribution channels and developing business relationship for the company as a key need that startups should ensure they fill.

5 – Ran out of cash

Money and time are finite and need to be allocated judiciously. The question of how should you spend your money was a frequent conundrum and reason for failure cited by failed startups. The decision on whether to spend significantly upfront to get the product off the group or develop gradually over time is a tough act to balance. The team at YouCastr cited money problems as the reason for failure but went on to highlight other reasons for shutting down vs. trying to raise more money writing:

The single biggest reason we are closing down (a common one) is running out of cash. Despite putting the company in an EXTREMELY lean position, generating revenue, and holding out as long as we could, we didn’t have the cash to keep going. The next few reasons shed more light as to why we chose to shut down instead of finding more cash.

The old saw was that more companies were killed by poor cashflow than anything else, but factors 1, 2 and 4 probably are the main contributing factors to that problem. No cash, no flow. The issue No 3 – the team – is interesting, as if I take that comment ” I didn’t have a partner to balance me out and provide sanity checks for business and technology decisions made” and think about some of the founders and startup CEOs I know, I can safely say that the main way that any decision was made was by agreeing with them – it was “my way or the highway”. I don’t therefore “buy” the team argument, I more buy the willingness of the key decision makers to change when things are not working (aka “pivoting” – point 9).

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About the Author

This article was produced by Broadsight. Broadsight is an attempt to build a business not just to consult to the emerging Broadband Media / Quadruple Play / Web 2.0 world, but to be structured according to its open principles. see more.

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Callum Connects

Jasmine Tan, Director of Stone Amperor

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Jasmine saves her clients time and effort when doing kitchen fit outs with her biz Stone Amperor.

What’s your story?
I started working in the industry in 2003. I was in a marble and granite supplier company for 5 years. Even though I left the company, I still had customers calling me for my services. I referred them back to my previous company but they refused to because they loved the fast response service that I offered. I realised that customers do look at prices, however most of them prefer quality over quantity. Thus I have decided to establish a sole proprietor company also known as 78 Degrees which later rebranded as Stone Amperor in 2014.

What excites you most about your industry?
The kitchen countertop industry is a very confusing market. There are many brands, materials and prices to choose from. What excites me the most is my ability to help clients choose the best materials and brands within their budgets, whilst saving them time and effort.

What’s your connection to Asia?
I have been in Asia all my life and I love Asia. No matter where you go there is no place like home.


Favourite city in Asia for business and why?
I love Singapore. This is because Singapore has always been a stable country and it is great for doing business. However as it is a small country, it can be really competitive. I believe that if just do your best and give your best to your customers, you can overcome this.

What’s the best piece of advice you ever received?
“Take actions. Learn and improve continuously. An idea without action is just a dream.” This was really good advice that I received from my partner.

Who inspires you?
A very down to earth billionaire from Malaysia, Robert Kuok

What have you just learnt recently that blew you away?
Property is the foundation of every business.

If you had your time again, what would you do differently?
Own instead of renting property for my business.

How do you unwind?
I enjoy going shopping, watching movies and hanging out with friends. I am quite a simple being.

Favourite Asian destination for relaxation? Why?
I love going to Taiwan as I love the culture there. Everyone is so polite and the weather is great.

Everyone in business should read this book:
Sun Tzu, Art of war

Shameless plug for your business:
Perfect top, Perfect price, Perfect life from Stone Amperor

How can people connect with you?
Email me at [email protected]

Twitter handle?
@StoneAmperor

This interview is part of the ‘Callum Connect’ series of more than 500 interviews

Callum Laing is an entrepreneur and investor based in Singapore. He has previously started, built and sold half a dozen businesses and is now a Partner at Unity-Group Private Equity and Co-Founder of The Marketing Group PLC. He is the author two best selling books ‘Progressive Partnerships’ and ‘Agglomerate’.

Connect with Callum here:
twitter.com/laingcallum
linkedin.com/in/callumlaing
Download free copies of his books here: www.callumlaing.com

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