Influencer Marketing: Get In NOW because Instagram is Preparing to Bite the Hand that Feeds

It's impossible to talk about the rise of Instagram without mentioning the symbiotic rise of the Insta-famers, or influencers who have made their name almost exclusively on the IG platform. In fact, many recent articles have pointed to Instagram’s emphasis on partnering with influencers as the most important reason for its continued (and accelerated) supremacy over Snapchat. However, recent moves from the social media powerhouse that initially appeared to be deepening this commitment can also be viewed through a more cynical lens. Much like how Instagram's parent-company, Facebook feigned partnership with brands for years – strongly encouraging them to invest in “fan acquisition,” Instagram is now strongly encouraging influencers to build up communities of followers and partner with brands who want to reach them. 

If history is a teacher, the next step in this strategic plan will be for Instagram to muscle in and monetize those communities that influencers and brands have worked so hard to grow and nurture. Today, influencer posts get prime viewership in the recently updated Instagram algorithm, a move that further encourages brands to partner with them. The same was true of Facebook several years ago. I recall Reese's growing its "fan base" on Facebook by 6M fans just by investing time and energy in engaging on the platform. However, shortly after, Facebook pulled the rug out and the only way for them to communicate with that community is now through paid ads. How long will it be until Instagram makes a similar adjustment to its algorithm so the only influencer posts that get seen are ones that Instagram gets paid for, too?

Historically, this would have been a moot point. Influencers were paid on the side and a whole cottage industry has sprung up to serve the agents, brokers, and software tools that surround them. With almost a hundred million posts on Instagram every day, there was no viable mechanism for the ad serving team at Instagram to understand when an influencer was being paid to post. That opaqueness made it impossible for them to participate in what CNBC reports to be a $1B influencer market. 

Recently, Instagram announced a move that was initially lauded as not just supporting influencers, but helping both them and the brands they partner with comply with FTC guidelines on the subject. Their new “Paid Partnership” designation which allows influencers to identify posts that have been sponsored appeared to be recognition that brands and influencers alike would benefit from standardization.

­However, those of us who follow these developments closely understood what the move really precipitated. While on the surface it could be interpreted as helping brands ensure FTC compliance from influencer partnerships, in reality the FTC has been clear that "in platform" methods of disclosure are NOT sufficient for compliance, meaning they still expect influencers to use the #ad or #sponsored hashtags in their captions.

So why then, would Instagram roll out this new feature? Because streamlining all paid influencer posts on a platform-supported feature will allow them to track, monitor, and eventually monetize the sponsorship dollars flowing from brands to influencers. Yes, it's the last point that should be encouraging brands to move quickly on influencer marketing. Much like the gravy train of Facebook engagement came to an end, this is the first sign that the economics around Instagram influencers are going to change.

The tremendous value in influencer marketing today relates to the fact that it is relationship-based, and posts appear to be authentic, native, and largely NOT scaled to the extent that digital display networks (banner ads) and paid social ads are. For that kind of scale, Instagram has its paid advertising business that helps brands splay ads across its network. However, Instagram knows that its users have a clear preference for authentic posts from influencers and creators. As Instagram tries to insert itself in the middle of that influencer-follower relationship, it runs the risk that advertising-fatigued users will tune out. Therefore, it will have to be much more selective and surgical in how often it shows promoted influencer posts than the traditional stalwarts of digital media have been (banner ads, etc.)

Unfortunately for us marketers, in today’s ad-fatigued world, high frequency digital advertising and retargeting campaigns are accelerating the rise of ad blockers and banner blindness. So, two simple things are going to happen once Instagram starts insisting that every influencer post gets amplified with additional ad dollars behind it...

All it will take is a tweak to Instagram’s algorithm and the influence that their influencers have worked so hard to curate will plummet, forcing them to support their posts with paid spend or be pushed out of partnering with brands. This is yet another example of how the Facebook empire is feigning modernization in the advertising world while its real strategy is more simple:

Facebook/Instagram Business Strategy:

Beat down the big publishers and media companies by creating wonderful gardens of free content, then once they are on the ropes, roll out an advertising model that is eerily similar to the one they just disrupted. 

For marketers, the time is now to capitalize on influencer marketing, because when these changes come, the gravy train is going to pull into station. The inevitable bursting of the influencer bubble will be the final byproduct of this new paradigm, because in this new world, only the best content creators will survive as influencers. Much of the cottage industry will collapse, and only the brands who have developed real capability around influencer marketing will be prepared to operate in the more focused new world where every Millennial with an iPhone is not actually an influencer and the investment required for success is more substantial.