Instagram Ads For Franchises (Some Early Pros and Cons)

Before we get to the details on Instagram’s announcement that they are going to begin serving ads to their ridiculously large user base, I want to take brief moment to talk about what this means in the context of the broader internet context.

For those of you who have been around the internet for the past 20 years, you’ll be able to remember what it was like to see it evolve.

The earliest websites were big, read-only, static platforms that served some specific purpose. You visited the site. You knew what you were going to get. You did what you wanted to do and you left. These sites saw a boom in the nineties, but not many are still around today. However, a few key ones survived and still dominate how we use the internet (Amazon, EBay, Yahoo!, etc.)

The next version of the web focused more on user-generated, social content, that provided for a more interactive and dynamic web experience. Every time you visit, something new is waiting on you. “Social media” is probably not the right term, but some of these sites do fall into that bucket as well. Think: Facebook, Twitter, Yelp, Youtube, Wikipedia etc.

While there is debate as to what the next iteration of the internet is and will be, allow me to posit a major difference between the companies that you see above and what comes next. All of the companies referenced above are “websites.” They are places that you visit by typing in a URL and navigating around a set of pre-defined “pages.”

Something weird happened since those companies grew up, the “website” has been disrupted. No longer is internet innovation simply in the form of websites. Now we have apps as well. (And who knows what comes next?)

Additionally, one thing you’ll notice about all the websites above is that they all are rife with advertising. It was only a matter of time before ads were going to reach the next wave of companies too.

Instagram has grown up as a photo sharing and editing app. For those who have used it, you know that it is an amazingly addictive time suck. As camera technology has evolved on phones, it has empowered the entire world to take otherwise unimaginably high-quality photos and now video. And what better way to utilize that content than to share it with your family and friends (And strangers!)

From a company perspective, you probably heard that Facebook actually bought Instagram back in 2012 for $1 Billion. (Obviously, valuations have onlygotten crazier from there, as Facebook bought WhatsApp last year for $19 Billion.)

It was a foregone conclusion that advertisements would infiltrate Instagram at some pint. Well, finally that day has arrived. Instagram ads are here.

To help you think about what this means for you as a franchisor, let me go over some of the early pros and cons of Instagram ads.

Pros

• Instagram allows you to reach potential franchisees in a manner that you haven’t been able to previously. As we’ve spoken about before, it is imperative to continue to experiment with new ad channels, as the web is so dynamic. Simply doubling down on channels that have worked in the past is a short-sighted strategy that will leave you reeling in the future.
• Photos and videos may allow people to perceive franchise ownership more concretely than text. If you were to ask Americans “What does it look like to be a franchise owner?” you would very likely get a very wide range of answers. Now, you have the ability to control the visualization of the benefits of owning one of your locations. The possibilities are endless.
• Succeeding as an early adopter means that costs are low and ROI is high. Because the market for ads hasn’t matured prices will be lower. Imagine if you were the only franchise advertising on Instagram! Not only would you not have to pay a lot, but you would be the only competitor reaching millions of people.

Cons

• A new advertising platform means very high risk. Here, I define risk as the relative probability that multiple outcomes could occur. It doesn’t imply that the outcome will be negative, but it does mean that it will be hard to predict. There is no previous data to dictate what to expect from the platform. You could end up wasting A LOT of money. If you value predictability in your advertising dollars, Instagram ads aren’t right for you, yet.
• Educating users about franchise ownership doesn’t mesh well with the other content on Instagram. Usually, I would argue that the content on Instagram is more whimsical. People turn to it for a break from the otherwise stressful realities of life. Imagine seeing a cute picture of your baby nephew followed by an advertisement for a franchise. The flow will be weird, and therefore engagement may be low.
• Instagram is focusing on branding and e-commerce, rather than direct response. Ultimately, we write about lead generation as a four step process. And Instagram ads would fall into step 1. Usually, the goal would be to get someone to click on your ad and be taken out of Instagram and to your website. It doesn’t appear that Instagram is going to allow that behavior at the start. Rather, they are going to keep people in the platform, thus disallowing the redirect.

In conclusion, trying Instagram ads now is a high-risk, high-reward strategy for those looking for additional branding opportunities. If your franchise prides itself on being on the cutting edge of online marketing, then you should start testing it as soon as you can. (Instagram may not even let you yet.) But if you’re a franchise that wants a little bit more of an assurance that something’s going to work before trying it, Instagram isn’t ready yet.

If you want to learn more about how FranchiseHelp tests new advertising channels, shoot us a note here.