Clicking It’s Way To The Top:INSTAGRAM

When Kevin Systrom and Mike Krieger conceived a photo sharing application in 2010 and gingerly named it as a combination of “instant camera” and “telegram”, little did they know that one day it would turn out to be one of the fastest growing social media platforms in the world. (Recode.net 2015)1

Fig 1: An early sketch of the Instagram app, and the first ever Instagram image, taken by chief executive Kevin Systrom

Source: http://www.telegraph.co.uk/technology/technology-video/12064686/Rise-of-a-tech-giant-the-history-of-Instagram.html

A snapshot of history:

Instagram, the app that probably even your grandparents have heard of, has revolutionised online photo sharing. It started out as “Burbn”, a location sharing app. After the app failed, Systrom focussed on improving Burbn by analysing how customers were using it. They found the most used functionality was, surprisingly, photo-sharing (The Atlantic 2014). Kevin and Mike quickly decided to stress on photo-sharing services only. This resultant simplicity and one-minded focus have been credited for the amazing success of Instagram over the years.

Its rise and rise:

Within a few hours of its release, Instagram became the top free photography app in the Apple platform. In the next two months, it touched the one million user mark. The exponential rise continued with 30 million users by April 2012. From there, today it has developed into a marketing tool for businesses (Mancuso, Stuth 2015).

And then came Facebook:

There are many theories as to why Mark Zuckerberg dropped $1 billion to acquire Instagram in the spring on 2012:

  • Because Instagram was beating Facebook at its own game – A picture is worth a thousand words, and Facebook was not good with pictures. Photo-sharing made Facebook, but here was an app that was doing the same much better than FB So if you have the greens bursting out of your pockets, why not buy them out? You improve your services and gobble up the competition all in one stroke.
  • Because data matters – The gargantuan amount of data that our social media generates is essentially their bread and butter. Facebook has constantly acquired services with large data throughput without focussing on instant revenue generation. So it is no surprise that Instagram was an obvious target.

After Facebook’s acquisition of Instagram, its users have grown rapidly. By 2015 stats, it has 400 million monthly active users. (CNBC 2015)

The bells and whistles:

What are the underlying factors behind these impressive numbers?

Cool retro filters that make your pic look something from the 70’s and super smooth process of uploading pictures are primarily responsible for customers adopting the app in huge numbers after initial evaluation, features that the app still cherishes.

2

Figure 2: Instagram Filters

From a marketing perspective, Instagram targeted a segment of users who wanted nothing more complicated than taking a decent pic and posting it instantly online. It provided the optimum point between Hipstamatic’s (a photography app) use of interesting filters and Facebook’s social prowess, and that’s where it struck gold even in the saturated photography app market (TechCrunch 2012).

But what about the money?

Instagram doesn’t generate much revenue even today. Big brands have their feeds promoting their businesses, but they don’t generate revenues for the app. As with other social media platforms, advertising brings in the moolah. Facebook started including ads for the first time in the app in October 2013. These were “natural-looking ads”, mimicking posts from users rather than identifiable ads, and this has been reported as successful (Digiday 2015). Going forward, Instagram needs to think out new ways to capitalise its unique platform and user base. A time will surely come when the current phase of increasing user-base will plateau out, and the focus has to shift to generating revenues. Instagram has to start working on the right combination of tactics from now on to prevent going down the YouTube way.

BY

HEMANTH KUNDALA

STUDENT I.D: 214470099

References:

Journals:

Mancuso, J & Stuth, K 2015, ‘A Portrait of Modern Media.’, Marketing Insights, vol 27, Issue          3, p16-17. 2p., retrieved 20 April 2016, Business Source Complete, EBSCOhost.

Webpages:

Wagner, K. 2015, Instagram Is the Fastest Growing Major Social Network, Vox Media,           retrieved 20 April 2016, <http://recode.net/2015/01/09/instagram-is-the-fastest-  growing-major-social-network/>

Garber, M. 2014, Instagram Was First Called ‘Burbn’, The Atlantic Monthly Group,      retrieved 20 April 2016,             <http://www.theatlantic.com/technology/archive/2014/07/instagram-used-to-be-   called-brbn/373815/>

Kharpal, A. 2015, Facebook’s Instagram hits 400M users, beats Twitter, CNBC LLC, retrieved 20 April 2016, <http://www.cnbc.com/2015/09/23/instagram-hits-400- million-users-beating-twitter.html>

Cutler, K. 2012, From 0 To $1 Billion In Two Years: Instagram’s Rose-Tinted Ride To            Glory, Crunch Network, retrieved 20 April 2016,       <http://techcrunch.com/2012/04/09/instagram-story-facebook-acquisition/ >

Illustrations:

Figure 1. An early sketch of the Instagram app, and the first ever Instagram image, taken       by chief executive Kevin Systrom, retrieved 20 April 2016,                    <http://www.telegraph.co.uk/technology/technology-video/12064686/Rise-of-a-tech-       giant-the-history-of-Instagram.html>

Figure 2. Instagram Filters retrieved 20 April 2016         <http://techcrunch.com/2012/04/09/instagram-story-facebook-acquisition/&gt;

Videos:

Instagram: 4 employees, 4.25 million users 2011, YouTube, CNNMoney, 25 May,        retrieved 20 April, 2016, < https://www.youtube.com/watch?v=9YNTO82Mi90&gt;

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