Instagram and Its Powerful Influence Through Ads

SOURCE: AdvertiseMint

The economic principle I´m exploring is Institutions are the ¨rules of the game¨ that influence choices. 

My research question to help me study this economic principle is ¨How does the social media site Instagram influence users to buy specific products?¨. 

The article published in business.com titled, ¨Is Advertising on Instagram Worth it?¨ demonstrates this economic principle by showing exactly how Instagram uses advertising to influence users to buy the products featured, and how they determine their target audience.

First, the author of the article, Hsiao, writes about how ads on Instagram work. She explains that images that show up on your feed will be labeled with the word ¨Sponsored¨ at the top of the image if they are advertisements. Sponsored images will show up multiple times on your feed and are ¨ clearly visible and are targeted based on your interests¨. This leads into the next point of the article, how Instagram targets their ads.

Second, Hsiao explains how Instagram targets their ads. According to the article, Instagram targets its ads based on certain traits which include gender, age group, and interests. Additionally, since Instagram is owned by Facebook, if you have a Facebook and link it to your Instagram, it will have more information on your likes and dislikes.

To further prove how effective advertising on Instagram is to influence users into buying products, Hsiao sites a campaign launched by clothing retailer John Lewis who targeted women from the age of 25 to 34 for six weeks. The results? According to the article, Instagram reported that ¨John Lewis increased the number of followers it had by 10,000…[and] also saw 14 times the amount of purchasing intent for women within their chosen age range.¨

In my next blog post I will research the question: How does Instagram use celebrities to endorse products?