Instagram-Omnicom Deal Signals the Future of Digital Advertising

The Web is visual and brands should be, too

The Omnicom Group’s $40 million pact with Instagram, as reported by Adweek last week, reinvigorated excitement about the marketing potential of mobile and social media.

Mark Zuckerberg, in particular, must be happy that his $1 billion investment is moving toward becoming an ad-supported vehicle. This massive advertising commitment comes with Instagram’s insistence that it maintain creative control of its ad partnerships—only brands that pass muster as worthy creative partners will be allowed on the swiftly growing mobile platform.

But beyond the noteworthy implications to Facebook’s ad model trajectory and the impact to Omnicom’s business as it readies for the imminent approval of its Publicis merger, the deal brings into clear focus a broader, more fundamental change in digital marketing. In essence, the partnership is a very public acknowledgement of the industry’s faith behind investing in a more visual, native approach to advertising in response to the emergence of the Visual Web.

The rise of banner blindness, fraud and a myriad of other defects have marketers seeking alternatives. A deal of this magnitude by a major Madison Avenue holding company is a vote of confidence that a paid advertising model that is largely visual, and can be successful without a direct-response component. It’s no wonder why. While Instagram may have been one of the first to lay the groundwork for purely visual content, it is not alone. Every day, more publishers—including Time, Fox News and NBC News—are redesigning their sites in a visual-centric manner and de-emphasizing text. The escalating adoption of mobile has necessitated the change. Images are the way today’s tech-savvy consumers prefer to consume content.

Instagram provides a forum for shareable content presented beautifully, instream. What this means, as this deal implies, is the opportunity for a consumer to see a high-quality piece of advertising content, with the ability to share it. This carries greater power compared to the click. On Instagram alone, 16 billion images have been shared, 55 million photos are added every day, and 1.2 billion likes happen daily. Advertisers do produce high-quality content, and exposure to this level of true consumer engagement is priceless (or is valued well into eight digits).

Brands will now create and design ads with the clear objective of having this branded content be shared exponentially. To that end, Omnicom’s clients will be forced to rethink creative, and ultimately high-quality content will win out, not that which is flashing and blinking. What these brands produce for Instagram can be applied to the rest of the Web, meaning everyone wins—brands, publishers and most importantly consumers.

Is it any surprise media is headed in this direction? The rapid adoption of smartphones and tablets have made us rely on visuals to tell stories. But that is something that has always been inherently prevalent in human nature. Consumers are less tolerant of disruptive media experiences.  Everything has to be as sophisticated and seamless as the technology they are using.

Despite the promise and excitement, we also need to catch our breath and look at some of the challenges. While this deal will help Omnicom clients reach customers with big, beautiful images, will they scale? That is a challenge because they will not be able to effortlessly replicate this same ad across other sites, limited by different layouts, formats and technology across the spectrum of publisher sites. It’s hard to make an image of a car that’s much wider than it is tall fit nicely in the taller, narrower slot of a different publisher.

Beyond that, Instagram may be great for some brands, but not a fit for others, as its audience is largely young and female. Over 90 percent of the 150 million people on Instagram are under the age of 35. And of Instagram's 150 million monthly active users, more than 60 percent live outside of the United States.

Omnicom and Instagram must also be careful not to oversaturate the audience with ads or the audience will flee. On a site that is largely based on photo sharing, with no firm editorial context, it will be a challenge to ensure the ads fit into the context of the user’s feed and be relevant. Even if it is beautiful and not disruptive, if it is not providing value, it will not be effective.

All things considered, this deal signifies a major step in the right direction for the future of advertising, but this approach cannot and should not be limited to just one site. The Web is moving visual, and so should brands. 

Eric Berry (@ezberry) is CEO of TripleLift

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