Why Instagram’s “Barter Economy” is a Good Thing

…For marketers, influencers, and consumers.

Last week, The New York Times published a piece on how influential Instagrammers are being courted by luxury brands with offers of free swag and other out-of-this-world perks in exchange for photos. We’re talking “all-expenses paid trips to Iceland” levels of incredible. AdWeek also chimed in with a follow-up article calling it Instagram’s “secret barter economy.”

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Well, it’s definitely not secret any more (and really, was it ever?) but it is essentially a barter system. With the race in full swing to reach the ever-elusive, Instagram-loving Millennial generation, it’s easy to understand why brands would jump at the chance to trade their luxury swag for thousands of highly engaged Millennial eyeballs paying attention to Instagram influencers and their feeds.

But before anyone starts crying #GramGate or claiming that Instagram influencers are “selling out,” let’s remember that brands and influencers have had this sort of relationship for years. Companies send product to bloggers, who “repay” the brand with an honest review on an influential blog with thousands of readers. We all know that drill.

The only notable difference this time is the medium: photos instead of text. But even that’s not new, because as the Times article also points out, Coach has been hiring popular Instagram users to promote their products for two years now.

So if Instagram’s barter economy doesn’t mean it’s time to gape at the network’s lost integrity, what does it mean?

Beyond the selfies and the food pics and the filters, Instagram represents something awesome for social media marketing: an opportunity to turn things around in an age of news feeds spammed with poorly-targeted promotions.

First of all, what do nearly all of the examples of trades between brands and Instagrammers have in common? They promote experiences rather than just products. A vacation in Iceland (+ Dom Pérignon). A road trip adventure (+ Mercedes-Benz). Even the “smaller” trades do this: a photo of the excellent drink selection enjoyed at a restaurant, for example.

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We accept the following to be true:

  1. Marketing is about telling stories
  2. Stories about experiences are more interesting than statements about objects
  3. Visual content is more engaging to Millennials than written content

Instagram enables brands to convey a story about an experience through a single photo that is instantly broadcast to thousands of their target demographic. That’s worth paying attention to (and paying for).

Secondly, these examples are proof that it’s possible to promote your brand in an unobtrusive and authentic way – a feat that has eluded many a brand on other networks. Though both Facebook and Twitter have updated their algorithms to address the fact that users feel inundated by promotions that are more disruptive than helpful, many brands still continue to spam audiences with little thought to tailoring and targeting.

With the current Instagram economy, however, influencers have the power to maintain their authenticity:

“Instagram influencers say they have fielded significant interest from brands in the last year – and that even large corporate brands agree not to interfere with their creative process. The labels aren’t just looking for help reaching niche Instagram communities. They often also want assistance creating effective marketing images. That means they need the Grammers to present their products to their homegrown audience with the aesthetic that drew the audience in the first place.”

While a different type of “targeting” than the kind digital advertisers are used to on other social and search channels, it’s highly effective: by handing the creative reigns over to the Instagrammer, the message is innately tailored to what their audience wants and expects to see from them.

All one has to do to confirm this maintained authenticity is to take a look at the feeds of any of the Instagrammers mentioned in the Times article.

So what are we left with? Brand stories told through captured photos of experiences, conveyed to an already-interested, targeted audience. Brands (and their agencies) benefit because they get the eyeballs they want, influencers benefit because they get awesome experiences to photograph and share with their followers, and audiences benefit because they are delivered promotion tailored for them to actually enjoy.

Far from selling out to the marketing man, I’d say that’s pretty darn good for everyone.

winners

So how can your brand jump on the opportunity Instagram presents? The first step is to embrace Instagram as an important part of your marketing strategy. From there, you can:

  • Identify the influencers relevant to your brand – there are a variety of tools that can do this, but even without fancy tools you can research your current audiences on all networks and owned properties to find out what Grammers they follow.
  • Pledge to leave creative control in the hands of the Instagrammers – it’s better that way for both parties, for reasons explained above.
  • Start an Instagram handle for your brand so influencers can tag you and send traffic to your feed.

Good luck, future BrandGrammers!

JJ Samp

Marketing Analyst

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Posted on October 24, 2014 in Advertising, Marketing, Social Media

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