POV: Instagram Shop Tab Ads

Background:

Instagram is continuing its e-commerce push with the test of ads in its Shop tab, providing a new way for brands and retailers to reach people that are ready to shop.

Details and Implications:

Instagram Shops (digital store fronts for merchants) launched last year to make Instagram more of a shopping destination and create new opportunities for brands to sell products directly on the platform with an integrated checkout experience. The Instagram Shop tab then followed, replacing the ‘activity’ tab in the bottom navigation to deliver a personalized feed of products to each user. These features were introduced as Instagram attempts to move away from being just a photo-sharing platform towards something more commercially driven, not just a place to connect with friends but also a place to shop.

Now the platform is testing ads in the Instagram Shop tab, which will launch with an auction-based model like the other advertising products across the Facebook ecosystem. The test is being conducted with a small number of US advertisers, including Away, Fenty Beauty, Donny Davy and DEUX, encompassing some of the more popular categories that Instagram users shop for, such as beauty, home décor and pet products. If initial testing is successful, Facebook will roll out the format to other markets over the next few months, although the timing and details are currently not determined.

The ads will appear in the Shop tab feed as either a single image or in carousel format, they will be marked as ‘sponsored’ and will, of course, be shoppable. Clicking on a sponsored product listing will take you through to a product details page to get more information, view additional images and see other products from the retailer. The ads will only appear on mobile as the Instagram Shop tab is a mobile-only feature and the number of ads a consumer sees will depend on how they use Instagram and how many people are shopping in the Shop tab. Facebook plans to monitor consumer sentiment and balance the content.

As major retailers like Amazon start to adopt more social elements into their properties such as live shopping videos and other social platforms including Snapchat, TikTok and Twitter build more e-commerce capabilities, Facebook is doubling down on its push to make all its platforms more shoppable in the face of this competition and trying more ads (its main revenue driver) in more places to facilitate that. Earlier this year, it rolled out ads in Instagram Reels and began testing sticker ads in Facebook Stories that would allow people to include stickers in their stories that included product ads. Shop ads on Instagram seems like the most obvious next step and will provide some interesting opportunities for advertisers who wish to use the platform to drive more e-commerce. 

Summary:

If testing is successful and this new advertising format expands beyond the US, ads in the Shop tab will provide another way for brands and advertisers to harness Instagram’s audience and target them with personalized ads to try and take advantage of the e-commerce potential on the platform.

Further Reading: TechCrunch | The Verge | Adweek | AdAge