2016 was the "defining year for Instagram," says James Quarles, Instagram's VP of Business.
The Facebook-owned app got a new interface (black and white), a new logo (bright colors) and a new product that sounds and looks quite a bit like Snapchat Stories. To sound like a TV ad (or an Instagram spokesperson), that's not all! It's true: Instagram unleashed more updates last year than it ever had before.
SEE ALSO:Here's how DJ Khaled could manage his Snapchat Stories AND his Instagram StoriesBut now we're in 2017, and Instagram wants to make sure all those changes and its future steps help the app grow more and, importantly for Wall Street, support a lucrative and sustainable business. Ad sales on Instagram are expected to reach nearly $3 billion by 2017, according to eMarketer, up from $60 million in 2015.
One million advertisers
On Wednesday, Instagram announced it had reached 1 million monthly active advertisers, up from 200,000 a year ago. It's quite impressive growth, but you also must remember that Instagram has the benefit of piggybacking off Facebook.
In comparison to Facebook's more than 4 million monthly active advertisers, Instagram's collection is quite small. Still, that's only the case when you're comparing it to one of the world's biggest online advertising giants.
"These are big milestones for us, important milestones for us. It's put us in pretty rare company for an advertising business like ours," Quarles said. "We certainty aspire to have all of those businesses on Instagram. We see it as potential head room for us, but there's lots of use cases where people are just on Instagram."
Quarles attributed three aspects for driving Instagram's growth: small businesses focus on passions; simplicity of managing business on Instagram; and continued investment by the company to focus on sales rather than "number of follows and likes."
Instagram, similarly to Facebook, pitches its value to big companies by saying it can drive and track sales. When you watch a commercial on TV or see a billboard, it's hard for businesses to see what happens next. That is far from the case for an ad on Instagram.
Booking on Instagram
In fact, on Tuesday, Instagram released a new in-app shopping feature, which it began testing in November.
The app is creating a new "booking" feature that helps companies like hair salons make direct sales. Businesses can add the following options to their profile: Book, Directions, Call and Email.
Here's the demo video on how booking works:
The feature will be out in the coming months, Quarles said.
About 8 million businesses have official business profiles on Instagram. The greatest growth is coming from the United States, Brazil, Indonesia, Russia and the United Kingdom, according to Instagram.
But will people actually use the tool? According to Quarles, more than 120 million Instagram users "visited a website, got directions, called, emailed or direct messaged to learn about a business." About 80 percent of Instagram users follow a business. Eighty percent sounds like a lot but it immediately made me wonder why not more. Cue Quarles.
"A lot of it comes down to people who are new to Instagram, learning what to follow," Quarles said. "Instagram for many people is a close personal network … We’ve watched that number grow, and we’re very proud of how much business has grown."
The Stories
Beyond new tools like booking, Instagram offers a bunch of statistics and analytics to business owners. These analytics are visible on the app for individual posts and for Instagram Stories.
While Instagram for many users — like Mashable'sown Damon Beres — is all about the likes, Quarles says Instagram doesn't want advertisers to judge their success in that way.
"We're getting away from emphasis of number follows and likes," Quarles said. "Likes, impressions, reach and comments, but also saves where users are going through and saving to come back to later."
Instagram is also quite pleased with its launch of Stories, a Snapchat clone that has close to the same amount of people using it as Snapchat does overall. And more importantly for Quarles, business are using them not only as paid advertisement but also in general use.
"I think Stories remain a big priority," Quarles said. "We're excited to see people keep that experience there. Our mission for the entire product is to have inclusive, shared experiences that strengthen relationships."
Instagram versus Facebook
So Instagram is becoming more like Snapchat but what about cannibalizing its own parent app, Facebook? Instagram has defended this fear repeatedly, even releasing a blog post directed to businesses and titled "A Tale of Two Feeds."
According to Quarles, Facebook and Instagram still remain to be two very different experiences. "Facebook is a network of friends and family. Things that we shared are really varied like links, photos," Quarles said. "Instagram is only media."
There's also an asynchronous model, where if you follow an Instagram account, the person or the business doesn't necessarily have to agree to follow you back. Though, that's also true for Facebook Pages.
Still, it's different. Instagram is "visual inspiration ... versus the personal discovery lens of Facebook," Quarles said.
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