The photo-sharing service owned by Facebook Inc. is bringing advertising to its Canadian users, starting on Monday.
The advertising push comes to Canada just more than a year after Instagram announced it would start advertising in the United States. Since then, ads have appeared on Instagram in the U.S., Britain and Australia. It is an effort to turn the social network founded just over four years ago into a "sustainable business."
For the Canadian launch, Instagram has picked six advertisers it will work with at first: Hudson's Bay Co., Target Canada, Sport Chek, Air Canada, Travel Alberta and Mercedes-Benz Canada. It is already in discussions with a second round of Canadian advertisers to launch campaigns in the coming months.
All of those advertisers already have Instagram accounts, and users who choose to follow those accounts see their photos. The new ad strategy lets companies pay to reach people who do not follow them. Advertisements will look just like regular Instagram posts, except for a tag that marks them as "sponsored."
That is important because the ads will appear within the "feed" that Instagram users scroll through regularly, not off to the side like traditional banner ads people usually see online. Rather, ads are designed to look like the rest of the content on the service. Advertisers are hungry for this type of opportunity on mobile devices – Instagram is overwhelmingly viewed on mobile – because the type of ads traditionally sold online don't work well on smaller screens.
Facebook's revenue has been rising largely on the strength of its mobile ads, which now account for 66 per cent of its ad revenue.
Advertisers see the service as a brand-building vehicle, as opposed to a place to advertise sales or promote specific products, said Frederick Lecoq, senior vice-president of marketing for FGL Sports, the division of Canadian Tire Corp. Ltd. that includes Sport Chek.
"When you look at the consumer-decision journey, there's two steps … there's the shopping trigger and the purchasing trigger," Mr. Lecoq said. "In the past, most of the time, the shopping trigger was TV ads. I think that's where Instagram is going to play."
Advertisers in the U.S. have already had some success with their campaigns. When Chobani LLC wanted to persuade people to eat its yogurt at times other than breakfast, it launched an Instagram campaign that reached four million people in the U.S., and led to a 7-per-cent increase in people who considered it a food for "any time of day." Taco Bell saw a 29-per-cent lift in people who recalled its ads after a campaign targeting younger Instagram users. It reached 12.5 million people ages 18 to 44.