Retailers seem to love Instagram, which is now drawing 300 million daily users and 500 million monthly users. The vast majority of its 200,000 advertisers, per the social media platform, are small-to-medium-sized businesses—and it probably stands to reason that a good chunk of them are either ecommerce or multichannel players.
Over time, Instagram has upped its ad offerings for retailers, from unveiling Shop Now buttons about a year ago to rolling out call-to-action buttons as recently as this month. Its ecommerce promos let visitors click through to an advertiser's home page or specific product page. But the Facebook-owned platform has been reluctant to offer end-to-end commerce, complete with a shopping cart and users' stored credit card information—capabilities its parent, Amazon, Google and now Pinterest offer merchants.
James Quarles, global head of business and brand development at Instagram, explained why his team hasn't closed the transactional loop, proclaiming more than once that the mobile app's focus is on user discovery when it comes to all content, including commercial items.
"The ability to buy now—we've deliberately not gone down that path," Quarles said, speaking with Adweek last week at Instagram Beach at Cannes Lion. "People just don't see an image and say, 'OK, got it, done.' There's the research phase, the merchandising … that's where we want to invest time with the retail partners to try to figure out what information is needed in that intermediate space that we can help provide."
His company has said that 60 percent of its users stated that they discover products and services on the platform, while 75 percent of them said they take action after being inspired. But inspiration is only part of a consumer's path to actually charging his or her own credit card for a pair of corduroys or a cool T-shirt, Quarles suggested.
"And where does the person really want to purchase? Do they want to go into the boutique? Do they want to go directly to a desktop and save and do it later? Or do they want to go into their favorite app on their phone? I think there's a number of ways for the best transactional experience," Quarles said. "Right now, we are not trying to build and compress all of that into Instagram."
From an outside perspective, it's not difficult to imagine his platform testing a pure shopping cart down the road, but Quarles said the real emphasis is on the customer journey and listening to advertisers.
With that in mind, Salesforce and House of Blues represent two brands doing a great job with Instagram ads, Quarles pointed out. In terms of the music-venue chain, the House of Blues in Charlotte, N.C., tested targeting people with ads on the mobile app that drove a significant lift in tickets sold, and then the brand rolled the Instagram strategy out to 40 markets.
"People on Instagram are twice as likely to go to shows," he added.
But it doesn't seem likely that they will be buying the ticket to get into performances directly via Instagram any time soon.
"I think the journey is more circuitous, and it's really interesting for us to try to solve that with the retailers and the brands themselves," Quarles said. "That's the fun part. [Developing that process] will be our strategy for the coming years."