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Comment by briandear | Hacker News Reader

Instagrams revenues are increasing because Facebook advertisers unwittingly are having their ads run in Instragram. You have to opt-out. Found that out after blowing through and ad budget that got consumed more quickly because of Instragram.

Instagram users as a cohort are the worst audience for advertising. Low conversions, lots of impressions and just all around less profitable than the exact same ad on Facebook itself.

Even music acts that would seem to be a tailor made product for Instragram – still, in my anecdotal experience, a complete waste of money. Instagram the “thing” might be a fun product, but Instagram as a provider of cost-effective advertising, no way.

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I have to say that as a consumer, Instagram Ads sway my opinion far more than and grab my attention far more than Ads on any other platform. I'm a heavy user, but it's also something about the format and the quality photography that just gets me.

The targeting is incredibly good too. I've discovered random brands on Instagram that I've bought clothing from which I never would have expected to do. I would never consider such a thing if I see the same kind of advertising on Facebook or Twitter for example.

Instagram is extremely trendy right now, possibly far more than in the past when it was smaller.

Ultimately this should hurt Facebook if advertisers are tracking ROI they may just stop campaigns and go into other channels entirely.

One would think, but I think big brands don’t care. They are after “awareness” and not actual conversions. It’s like TV, how does one measure the ROI on a national Coca Cola ad? (I actually don’t know.)

What you seem to be saying is that Instagram is a good brand building platform over the longer-term vs platform to generate leads and transactions over the short term. Unless, there is a study to prove that I am not too sure. I usually find media agencies and platforms make this argument when they cannot justify the RoI of their platform in a direct and measurable sense. It is much like how Google tries to prove effectiveness of its display ads using a fuzzy metric called view-through impressions.

On the coke bit, coke actually does measure the RoI on its TV using a mix of brand track studies and marketing mix modelling. I know this because I have worked with agencies that Coca-Cola engages to do both and is really scientific and serious about it.

In that case the Instagram ads may be delivering some value!

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