INSTAGRAM CHECKS OUT
The rumours were true; Instagram has launched “Checkout with Instagram” in the US this week. Their strongest pivot into the eCommerce space yet, we’re very excited to see where this goes. One of Instagram’s biggest problems (for themselves, as well as for users) was that a user journey usually ended outside of the app. Now, finally, they’ve found a way for us to never have to leave them if we want to buy something... To read the official announcement, click here.
As much as Instagram themselves are hailing it as a very soft launch with “only” 23 brands involved, make no mistake as to what this means for retailers and Instagram alike as it further cements the need for brands to involve Instagram into the central media buy. “Checkout is just one part of our long-term investment in shopping,” the company said in their blog post. “We’re excited to introduce even more ways for people to enjoy shopping on Instagram this year.”
It’s the first time that Instagram has sought to encourage individual users to upload their payment details to the app (something we will cover in further detail), and it’s also a potential disruption to the affiliate marketing space as brands will no doubt favour this model over traditional CPA methods that have been notoriously difficult to integrate into the Instagram platform.
WHO’S INVOLVED?
Here is a list of the brands Instagram have partnered with for the launch of Checkout.
Adidas / Anastasia Beverly Hills / Balmain / Burberry / ColourPop / Dior / H&M / Huda Beauty / KKW / Kylie Cosmetics / MAC Cosmetics / Michael Kors / NARS / Nike / NYX Cosmetics / Oscar De La Renta / Outdoor Voices / Prada / Revolve / Uniqlo / Warby Parker / Zara
What we think is interesting from this list is the number of premium brands who have chosen to take part. Unsurprisingly, Burberry have got involved given their strong history of embracing new digital concepts, but there are some surprises; Oscar De La Renta, Balmain and Prada.
Luxury online fashion shopping tends to be more of a considered purchase journey, which often extends into an offline store visit. This leaves us to wonder whether Instagram and these brands will only upload limited high-margin product options, or whether they will be working together to create collections with a strong “real-time purchase” hook – i.e.; releasing product exclusive to Instagram.
Secondly, we do wonder whether the decision to include beauty brands such as Kylie Cosmetics is a sign that Instagram want to explore how the power of a celebrity can drive sales and use this as a case study before venturing into how influencers can get involved in the new CPA concept.
So, what does it all mean? More than anything we’re interested to see how this feature will integrate with Instagram’s other capabilities; standard posting, paid advertisement posting and sponsored content. We’re also keen to see how non DTC (direct to consumer) retailers, who make up an enormous percentage of global online sales, take to this concept with their profit margins being so much less than those of the brands who have signed up for the Checkout launch.
Here’s our ten pence…
WHAT DOES THIS MEAN FOR BUSINESSES & BRANDS?
We can already see that this will be a tricky concept to manage internally. PR and Content Marketing teams are already struggling to hold on to the management of their brand’s Instagram accounts, as Performance Marketing and more ROI driven departments start to take interest. “Checkout” won’t help with this, as it is yet another example of the role of an eCommerce expert overtaking that of someone who has traditionally handled Instagram from a communication or branding angle.
As ever, and as discussed in more detail below, we feel the businesses that will make this work will be those who fuse this concept into larger scale multimedia campaigns. Don’t let Checkout become the new “Re-targeting” (when a consumer browses a page, and the retailer then “follows” the consumer across their other website visits with adverts of the product they were browsing to remind them to make a purchase) with lazy, basic creative. If you’re going to get involved, get involved. Even the examples Instagram released are not purpose-shot for the platform, with poorly cut product images and incredibly old fashioned style creative.
Put simply; the best campaigns are the cohesive campaigns where a consumer is repeatedly attracted to the content, creative and product the retailer is offering. In order for a retailer to make this work they need to gather the Performance, Social, PR, Branding and eCommerce teams together and work out how they can, together, manage all aspects of media spend and eCommerce tactics to consistently reflect what they are trying to sell.
Furthermore, let’s not let this new initiative mean you forget what social media is all about. It wasn’t created to sell your stuff, it was created for you to talk to people. So don’t stop doing that.
CREATIVE = CONVERSION
We could talk all day about compromised creative; it’s the biggest struggle we have when running campaigns. What is a bit of a shame, or what we envisage as becoming a disappointment, is that because this feature is only available on a businesses’ main feed. So, if the eCommerce teams get hold of control in this area expect a surge of less dynamic, less creative content as these guys are not specialists in presenting main-feed content to audiences – at least in the way that those who have traditionally handled the social media accounts do.
Brands consistently shoe horn their financially driven requirements into social media platforms, without taking a second to consider whether or not the content produced matches their wider-scale media assets. This disconnect results in a confused consumer, and confused consumers are less likely to buy from you.
One thing Instagram themselves have been highlighting for a while is that the way a product or concept is displayed within Instagram will heavily influence its conversion success. So if your advert takes up a third of the phone screen, except a proportionately decreased return. Businesses are in such a rush to “get on Instagram” that they forget to do basic housekeeping. Can a consumer see the product clearly? Are you telling them what they want to hear, or what you want them to?
Instagram recently announced that they are creating the ability for brands to boost and advertise using influencer’s (or UGC) content on their channels, whereas previously they could only promote content from the brand’s own account. If nothing else, take this as recognition that Instagram has also caught on to the need for a cohesive user experience (UX) in order for brands to see whatever return they are hoping for.
As we said above, we feel the best success from Checkout will be those who integrate the feature creatively. Instead of just lumping your white-background product shots, use the social network properly. Checkout is available for Stories, grid posts and the Explore pages. Create content that’ll impress and explain your offering. Use video, show your personality – the opportunities are endless. If you can’t afford to do it well, don’t do it all. Remember this might be the first time a consumer “meets” you, and first impressions count.
If you don’t know how to do this, now is the time to employ a branding expert. Yep, you’ve wondered what these guys do for a while, in the same way you never quite understood the purpose of a Community Manager. Their “vague” and “unmeasurable” jobs are actually, we think, going to become the most important hire a business can make as the need for digestible, fast, enjoyable branded content becomes the secret to success.
WHAT DOES THIS MEAN FOR AFFILIATE MARKETING?
Firstly, have a think as a consumer of where you are most likely to go if you need to buy something. For UK consumers the answers will most likely be; ASOS, Net A Porter, Amazon or other retailers who do not make their products themselves, instead they buy them from other, smaller, retailers. This presents a large problem; if the profit margins are lower, how will Instagram be able to successfully launch this eCommerce concept without offering lower rates to make Checkout an attractive prospect for the companies they need to get on board?
Let's not beat around the bush; this is an affiliate marketing concept. As much as it feels very new for us, the Western consumer, it’s something that WeChat and Line picked up on a long time ago for the Asian markets. Instagram is actually, on a global scale, quite late to the party. They have positioned the fact that they will receive a “small selling fee” for aiding the sale as merely “helping fund” the concept, however, if you strip it down this is a very simple CPA (cost per acquisition) affiliate concept that will no doubt become a central revenue stream for the social network in the coming months – providing brands take it up.
Interestingly, “Checkout” is only available for organic content, meaning retailers cannot use any of Instagram’s Paid Advertising features, or in any way boost the content’s success. This is difficult for pureplay affiliate businesses as they most likely only have control over their brand’s Paid content aspects (reinforcing the need for an in-house, cohesive strategy).
Quite frankly we feel it’s about time Instagram started making some money back on all the organic promotion it’s given brands, retailers and services alike. With 1 in 2 purchase decisions in the UK being influenced by the platform, we can fully understand that they feel they should be finding a way to make some money on the content these companies use to promote themselves, for free.
Affiliate marketing, whilst may feel new to the general consumer, is a twenty five year old concept and is considered a little old by more dynamic, forward thinking, retailers. Little has been done to bring it into the 21st Century; even the most prominent attempts have their limitations as networks hold back on revealing clear data for businesses who run their programs through them. In our opinion Checkout has been structured in a way to be managed internally, so the role of an agency will be interesting as this concept rolls out…
As a summary; whilst Checkout does reinforce the concept of affiliate marketing it will also put the spotlight on agencies and internal teams who don’t have the capabilities or knowledge of how to integrate affiliates into modern-day marketing plans. We’d advise anyone who works in that sector to think very carefully about how you can futureproof what you provide for a business, which in our minds is simply the ability to integrate the concept into broader strategy, rather than singling it out as a stand-alone concept.
FINALLY, WHAT DOES THIS MEAN FOR INSTAGRAM USERS (CONSUMERS)?
Ultimately, you as a consumer, still hold all the power in this. If you don’t buy stuff, none of this works. We’re surprised how little has been done on Instagram’s part to make consumers aware of the new concept. That said, they have made it impeccably easy for us to spend our money with them…
We no longer need to go anywhere to buy something we like the look of on Instagram. They’ve even thought to create an “Orders” section to our accounts to allow us to manage our purchases within the app (we do wonder where this will go, as Zuckerberg announced his attention to fuse the Messenger capabilities of WhatsApp, Facebook and Instagram together).
Your data is “safe” – providing Instagram behave themselves, which is pretty likely given the furore of Cambridge Analytica and Facebook last year. Your payment details stay with Instagram which is unusual for such a concept, both WeChat’s and Line’s programs hand this over to the brands you make the purchase from.
In summary, this an exciting pivot by the fastest growing social media network of all time. It is, however, a concept that has it’s limitations. If consumers don’t like what brands offer, they won’t buy stuff. As the expression says “you can lead a horse to water, but you can’t make it drink.” So, take the time as a brand to really consider the quality of the content you are pushing out to consumers if you expect Checkout to really work for you.
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