There was a collective gasp among start-ups when news broke that Instagram had been sold to Facebook for $1 billion. Not many deals get noticed, but when your company is acquired in a $1 billion deal by arguably the biggest social media platform, it is always going to generate lots of attention.
Discussions have raged about the acquisition, the astronomical figures involved in the deal and the competitive impetus that Facebook is going to get from the deal. Nevertheless, what is interesting people is what the implications of the deal are for Facebook in terms of the social media platform's perspective on content creation and distribution.
So why did Facebook find Instagram to be so valuable? Numerous complicated calculations are involved in the science of valuing businesses and that is something we are not going to get into. However, one thing everyone agrees is about is that Instagram's popularity was rising fast because it struck the right note at the right moment with its users.
Before the Instagram takeover, Facebook exclusively offered users a way to distribute their content. The platform did not provide users with any tools to create content (except for the typed status messages). This left the content creation niche open for others, a situation that was capitalized on by Instagram and Zynga for native camera photos, games, and record labels while Spotify allowed users to create and share music. The Instagram acquisition therefore represents the takeover of a technology firm that makes it possible for people to create as well as share content. For those unfamiliar with Instagram, when you snap a photo using your phone, the app directly accesses the camera allowing you to create content and share it simultaneously.
The shift by businesses towards content creation has been ongoing for quite some time now. Pinterest is one interesting case; while most users are not directly involved in content creation, they actively create their own Pinboards and the time users spend creating those vehicles of self-expression is quite impressive.
Offering a content creation platform creates ideal conditions for deeper user interactions and in marketing, this is invaluable. Facebook spend 1 billion dollars on a startup with no business model apart from their innovative ability to engage consumers. Here are some of the marketing lessons from Instagram's businesses model and Facebook's decision to acquire it.
Define a problem that other people did not know existed
For instagram, the problem they offered a solution for was that not all photos turn out great. For many people, that was not a problem, just another fact of life- like a bad hair day. Even with the most sophisticated camera, one can take hundreds of ordinary looking photos. Instagram allows you to take the photo using your phone and overlay it with your own retro finish to make it look more professional.
Defining the problems is one of the easiest ways creating a compelling marketing message
Make consumers look good
The human desire to move up the food chain should never be underestimated. Whether it is social standing, looks or bank accounts, everyone wants to go up. Instagram became a solid hit because every user could now add “photographer” to their resume. The app's social sharing function allowed consumers to create their own audience to admire their efforts. Building a portfolio became easier and more people could get established as tastemakers with gifted vision.
How can you ensure that your business makes your target audience look better than their peers, friends, and the rest of the world? This should be clearly articulated your marketing pitches.
Make others generate the buzz for you
Instagram is not the only photo sharing service and neither was it the first. However, when it comes to fame, the service in a different league altogether. They did this by ensuring that their users became their devotees who marketed the service free. The company's marketing team never had to come out and say how good their service is, since its uses were already doing a better job of it.
So how can you get others to do the marketing on your behalf?
Offering an excellent service or product is a must, and so is customer engagement and service. However, another method that businesses rarely use is finding a story behind the startup that users can relate to. The remarkable story about Instagram is that only 13 people had been running a photo creation and sharing service with over 30 million users. They duly got their reward for their efforts in the $1 billion buyout.
So do not just concentrate on flicking out press releases, think about the story behind your startup and present it to people. Is it something millions can identify with? Ensure that you pitch it to the right media outlets.
Seek out partners
Facebook needed to bridge the gap between content sharing and creation. For a social media site that appealed to billions, the platform was desperately in need of a way increasing consumer engagement. Since content creation was not the brand's competency, they did not try to re- invent the wheel. They simply got out and sought help from others who were better equipped to offer the service. Instagram's takeover by Facebook shows that marketers should always be on the lookout for other companies that can deliver services that are not within the scope of their business. Having a partner when running a campaign will more often than not result in better consumer engagement.
Win over your critics
For those in the service industry, the importance of winning your critics over cannot be overstated. After the acquisition, Facebook introduced a whole raft of changes that led to a small portion of user leaving the site. Instead, Facebook should have paid attention to social conversation centering on Instagram and how it can be improved. It should appeal to the original consumer base and retain Instagram' focus of delivery.
Even when you have good ideas for improving your product or services, it is prudent to abstain from making too many changes too soon since this can generate a backlash.