Instagram to begin selling ads…not surprising and not creative.

So recently it was announced that Instagram will be monetizing the service by…selling ads.

Is anyone surprised?  And furthermore, is this seriously the best we can do?  Advertisements are the laziest monetization strategy in the history of the world.

Here’s why…

Riddle me this?

Why is it that people will pay for TV service, cell phone service, magazines, music and all other forms of communication and media, yet social media sites and tools still remain free and ad-supported as if there is no inherent value in the service itself?

  • Facebook is the single largest platform to connect people across time and geography that has ever existed, why does that have to be free?
  • Instagram has become the most popular photo sharing service and is practically a necessity for teens, why does that have to be free?.
  • Twitter is a giant searchable public conversation that allows for real time news and connection to anyone and everyone with an account, why does that have to be free?.
  • YouTube will allow people to upload an unlimited number of gigabytes of content, no matter how awful, to a server for the entire world to see, share, embed and mashup. Why does that have to be free?

Why is the prevailing notion that no one would pay for these services?  Take away someone’s TV and they might be upset.  But take away people’s ability to connect (social media) and people will lose their minds.  I’m not saying to remove a free option or a free account, I’m saying recognize when your product has inherent value.

We’ve created an ad-supported monster

Investors have been lining up to pour money into sites and tools without a monetization strategy, and when they finally realize it and begin to demand monetization, we rush to turn these communities into money, and we turn to the first thing that has worked in the past…ads.

If we step back and look at it, these are tools that are profoundly changing human behavior, relationships, and daily activities.  Making ads the primary source of revenue is the work of small, lazy minds.

Facebook is ideally suited to profit simply from providing a valuable platform.  Without ads or sponsored posts, Facebook is inherently valuable.  Without ads, Instagram is inherently valuable.  Without ads, Twitter is inherently valuable.  What amazes me, is that not a single on of these services has thought to create additional value and charge for it.  Why are there no “Pro” accounts?  The only one who has gotten this, is Linkedin…and they are growing and generating a profit.

The greatest minds?

Ads are an inconvenience.  We all put up with ads in order to get a free service but 1 out of every 10,000 of us ever click on an ad.  No matter how good these ads get, they are still secondary to everything.  NO ONE wants ads.  Yet that’s all we see out of these companies: “we’ll sell you space to interrupt the only thing that makes this service valuable…the users.”

For all the hooplah about “thinking like Zuck” and the love affair with Silicon Valley, why has no one called out the very obvious fact that the sole source of revenue is a steaming pile of largely ignored garbage?  Meanwhile, marketers have been lining up, cash in hand, to get better analytics and a more integrative service.  In return we get more targeted ad opportunities that ultimately get ignored by 99% of people.

Ads, ads and more ads.

I’m not surprised but I expect more

I think we can do better and I think these companies are underestimating people.  I think it’s about time that we start charging for accounts on sites, and that should entitle users to an ad-free experience.  Facebook can still keep their free service for those that don’t mind having their data bought and sold to the highest bidder, but offer another level for those that choose to pay for the added benefit.

Same goes true for Instragram.  Rather than sell ads,  I would prefer to pay for the ability to have multiple account support, filters for my stream, the ability to make lists, additional filters, longer videos, additional sharing options, and more…

If the best that these companies can come up with, is to take our already noisy and cluttered streams and shove ads into it, then I don’t think we’re dealing with the brightest amongst us, I think we’re dealing with lazy minds.

Am I wrong?  Would you pay to use a social network?  And if not, why not?

  • http://about.me/stephenapp Stephen App

    As always, a thought provoking post Jeff. I agree that using ads is lazy. I also agree that they seem to be largely ignored by the community, and there are only so many ways that networks can make ads more “native” before they ultimately run out of ways to move them or change the design to create a temporary boost in engagement.

    I think social networks are scared to create a “pro” version or charge an access fee. One of the best parts of social media is that new networks routinely come along with new benefits and niche markets, and occasionally one will hit it big and become mainstream. I’m not saying it would definitely happen, but let’s say Instagram moves to a tiered pay model. Who’s to say another completely free network wouldn’t come along with a similar feature set and poach a meaningful percentage of IG’s customer base, making it hard to certain corporations to justify the “pro” account they have? Now IG is left with a smaller audience and too few paid accounts to turn a profit.

    Is that a likely scenario? No. Do I think that would happen? No. I just wonder if that fear is in the minds of these various free social networks. Ads are safe. It won’t make anyone rich, but the concept of incorporating ads into social networks has now been done long enough to establish that ads don’t largely turn away users. Therefore the risk is lower.

    Just my two cents. In regards to your question, I don’t think I’d pay for a pro account as an individual. On behalf of an organization, however, I’m sure I’d be more open to it.

  • http://www.jeffgibbard.com/ Jeff Gibbard

    Stephen,

    Thanks for commenting. Your comments and the comments on this post on Social Media Today, both touch on something similar: how paid accounts could turn off users or cause them to migrate. To clarify, I think the networks should remain free. I think they should sells ads. Even though ads are largely ineffective and wholly disliked by users, it’s profitable. The point of my post however is to suggest that there is a largely untapped opportunity in adding more features for a fee. What concerns me is that none of these networks have captured that revenue opportunity because the first thing they turn to are ads.

    I also think that there is a lot less migration from site to site than there used to be in the early days of social media. And when people do migrate, it’s largely because the site has stopped being cool or useful. A site loses cool when it becomes overrun with spam, ads, or irrelevance, and a competing service without those aspects is available.

    Currently, no alternative to Facebook exists solely because Facebook has the numbers.
    Currently, no alternative to Instagram exists because that is where people are.

    The point is that the value of the site is in the network that is there, and for some, a network can become more valuable by…providing more value. I would find Facebook 100x more valuable if I got better data, more customization, and the assurance that my data was safe (because I’m paying for it to be safe). The biggest issue is that with applications that are severely lacking in features such as noise control and filtering (like Instagram), it’s sad to see the first monetization tactic be advertisements.