Reuters
Instagram is testing ads in Explore.
- Instagram is testing ads in its Explore tab as it seeks out new sources of
advertising growth. - Head of business Jim Squires said that the ad format will mimic the creative and targeting for ads in Instagram's main feed.
- Advertisers said the move would help Instagram attract performance marketers, though Squires said it was also aimed at advertisers trying to grow brand awareness.
- Some advertisers also said ads in Explore might turn off consumers and pose brand-safety concerns.
- Click here for more BI Prime stories.
As Instagram looks for new ways to make money off its platform, it's testing ads in Explore, a 5-year-old section that shows recommended photos and videos.
Over the past year or so, Instagram has been pushing advertisers to shift from running ads in its main feed to Stories, its popular feature showing ephemeral video and photos, as its feed gets saturated with ads. Now, it's expanding ads to Explore that will pop up alongside curated content.
Instagram's head of business Jim Squires told Business Insider that half of its users - equivalent to more than 500 million users as of last year - visit the Explore tab each month.
"People are already going to Explore to discover new types of things that includes products and services," he said. "It's the perfect place to have ads about things that you're interested in."
Explore uses Instagram's algorithm to recommend content and accounts for users in a grid-like design. Once users click on a photo or video, the content expands to fit the size of the screen with a feed of similar photos and videos that users haven't previously viewed. The new ads run between photos and videos.
A screenshot of ads in Explore.
Squires said one goal of these ads is to help marketers reuse creative and targeting options they're already running in Instagram's main feed.
Similar to how marketers buy Stories and other ad formats, advertisers can check a box in Facebook's ad-buying software to run an Explore campaign. The same targeting criteria that advertisers use to run ads in Instagram's main feed will apply to Explore, Squires said.
Instagram plans to test the ad format with a group of small businesses and big brands before rolling it out to advertisers in the coming months.
Advertisers are looking for ways to diversify their Instagram spend
As Instagram's feed grows crowded with ads, Explore ads will help marketers reach a wide group of consumers, said Benjamin Arnold, New York managing director of We Are Social.
"Clearly there's a huge amount of eyeballs in Explore," he said. "It was only a matter of time before the platform found ways to monetize a high-value part of the platform."
Unlike the main Instagram feed, content in Explore is served to consumers based on what they search for - making the advertising opportunities comparable to Google and Pinterest's for performance-based advertisers, said David Shadpour, CEO and founder of branded content firm Social Native.
Instagram's Squires said ads in Explore are meant for all kinds of advertisers, though.
"All types of objectives should work here, whether it's direct response where someone is interested in purchasing a product to just learning about a brand," he said. "It's a complement to [the main Instagram] feed - it gives you the ability to reach more people across Instagram in this environment where there's a discovery mindset."
Advertisers worry that more ads will annoy consumers
ForwardPMX's paid
"We'll A/B test the placement to see how it performs but at the end of the day, we look at everything from an audience perspective - not necessarily a placement perspective within Facebook," she said.
Some advertisers expressed concern that ads in Explore would turn off users, said Brian Salzman, founder and CEO of marketing agency RQ.
"Given that stats that show that millennials don't trust traditional advertising as much as recommendations from friends and family, it could hurt what is currently so great about the organic relationships and intel being shared on Explore," he said.
Explore's large amount of user-generated content could pose future brand-safety challenges for advertisers, said Victor Pineiro, SVP of social media at Big Spaceship.
"I haven't seen any huge flare-ups that have caught fire on Twitter, but it's not a 100% brand-safe environment," he said. "Instagram has done a pretty good job of vetting its content, but just like YouTube, things always slip in."