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Instagram: Redefining “A Picture Is Worth a Thousand Words”

December 2, 2019 · Posted in Research

Instagram is a photo-sharing application that was founded by Kevin Systrom and Mike Krieger in 2010 (Garber 2014). Less than three months after its launch, the platform surpassed one million registered users, becoming the fastest social media network to reach this milestone (Latiff & Safiee 2015). While the team remained relatively small, its user base continued to rise over the next year, eventually reaching 30 million users at the time of its acquisition by Facebook in 2012 (Parrish 2015). Due to its popularity, Instagram has become a serious player in the world of digital marketing and branding (Latiff & Safiee 2015). It has also introduced the idea of an “influencer”, which is a user that has an influence over his or her followers (Yeru 2019). Companies contract influencers and celebrities to advertise their products for a fixed fee (Latiff & Safiee 2015) that is largely dependent on the number of followers they have (Chen 2017). Instagram also plays an important role in the casting of films and television shows, as it is an indication of how popular an actor is (Schulman 2018). While the application has many advantages, its users have been criticized for promoting controversial products or services (Gonzales 2019), failing to disclose the fact that they are being paid for specific posts (Rath 2017) and purchasing fake followers to make themselves appear more popular than they actually are (Ellis 2019). This paper will examine the growth of Instagram and how it has increased the worth of pictures from a thousand words to a million dollars.

Instagram originates from Burbn, a location-based iPhone application that Systrom created while he was teaching himself how to code (Parrish 2015). Driven by the success of Foursquare and named after his love of bourbon whiskey, the platform encouraged its users to “check in at particular locations, make plans for future check-ins, earn points for hanging out with friends, and post pictures of the meet-ups”. It was a fairly complicated venture, but the application only took Systrom a couple of months to build (Garber 2014). The first feature that he added was plans, which he described as a way of “socializing and gathering people together at a location in the future” (Recode Staff 2017). The application, however, ended up becoming too complicated from an end-user perspective, as it had a “jumble of features” that made it difficult to navigate. As a result, Burbn was not very successful (Garber 2014) and was only used by 100 people (Recode Staff 2017). Systrom continued tweaking the application, while also paying close attention to how its users were using it (Garber 2014).

While Burbn has been referred to by many as an “app” or “application” (including myself, as a matter of simplicity), it is important to note that it was not actually one. At the time of its inception, Systrom did not know how to develop mobile applications, so he instead created Burbn as a website that was optimized for mobile devices. While looking for financing for the project, he told potential investors that HTML5 was the future and that mobile applications were a thing on the past and that all that really mattered at the end of the day was that it worked on both Android and iOS devices (Recode Staff 2017). In March 2010, Systrom left his position as a product manager at Nextstop, a travel recommendation start-up, to work on Burbn full-time (Markowitz 2012). Shortly thereafter, Andreessen Horowitz and Baseline Ventures agreed to invest in the company (Recode Staff 2017), providing him with $500,000 USD in seed funding (Parrish 2015). They also suggested that he find a co-founder for the company, specifically someone that was knowledgeable in creating mobile applications (Recode Staff 2017).

It was at this point in time when Systrom decided to bring Krieger into the company as its co-founder (Garber 2014). The two were friends and classmates at Stanford University and Krieger was one of the original beta testers for Burbn, so he was already familiar with the platform (Recode Staff 2017). Together, they used analytics to determine how its users were using the application. Systrom and Krieger soon discovered that people were not actually using its check-in features, but were instead focused entirely on using its photo-sharing capabilities. Taking this into consideration, the duo decided to shift their focus on perfecting their “photo-sharing infrastructure” (Garber 2014).

In accordance to their discovery, Systrom and Krieger proceeded to study all of the most popular photography applications. They quickly realized that Facebook and Hipstamatic would serve as their two main competitors. As researcher Keith Sawyer explains in his book, Zig Zag: The Surprising Path to Creativity: “Hipstamatic was cool and had great filters, but it was hard to share your photos. Facebook was the king of social networking, but its iPhone app didn’t have a great photo-sharing feature” (Garber 2014). At the same time, the duo also noticed that the camera quality of smartphones was constantly improving and theorized that there would soon be an “inflection point where people don’t carry around point-and-shoots anymore” (Recode Staff 2017). Consequently, they saw this as an opportunity to develop an application that “made social photo-sharing simple” (Garber 2014).

In the summer of 2010 (Markowitz 2012), Systrom and Krieger “chopped everything” out of Burbn, with the exception of the “photo, comment, and like features” (Garber 2014). They were then left with the additional challenge of figuring out how to make their company “stand out”. Systrom discussed this with his then-girlfriend (and now wife), Nicole Schuetz, while they are on vacation in Mexico (Parrish 2015). She confessed that she was not actually interested in using the application due to being dissatisfied with how her pictures turned out (Clifford 2018). She also noted that her pictures did not look as good as his friend Greg’s, to which Systrom responded by saying that he used filter applications to make them look better. Schuetz then suggested that he add filters directly into Burbn. Shortly thereafter, the couple returned to their bed and breakfast and Systrom spent the remainder of the afternoon learning how to create a filter. This filter became X-Pro II, which was the first of many filters that were added to the application (Parrish 2015).

Systrom and Krieger spent the next eight weeks (Markowitz 2012) further developing the application and creating different prototypes (Garber 2014) and on October 6, 2010, it was officially launched as Instagram (Parrish 2015) through Apple’s App Store (Latiff & Safiee 2015). The name is a portmanteau of “instant” and “telegram”, which according to Systrom, was chosen because it “sounded camera-y” (Markowitz 2012). Just prior to the launch, he shared the application with several of his “influential friends” (such as Jack Dorsey, the founder of Twitter), who posted photos that they created with the platform on their social media accounts (Parrish 2015). Within 24 hours, the application was downloaded by 25,000 people (Parrish 2015) and by the end of its first week, it had been downloaded 100,000 times (Latiff & Safiee 2015). According to Systrom, people initially downloaded Instagram with the assumption that it was just a filter application: “they wanted to make their stuff look cool” (Recode Staff 2017).

By the middle of December, just two months and two weeks after its launch, Instagram reached one million registered users. According to Zulkifli Abd. Latiff and Nur Ayuni Safira Safiee, this was an extraordinary accomplishment in comparison to other social media networks, such as Foursquare and Twitter, which both took over a year to reach this milestone (Latiff & Safiee 2015). The company raised an additional $7 million USD in funding from a group of investors in February 2011. With only four employees, Instagram was valued at $20 million USD and had around 1.75 million registered users that were uploading an average of 290,000 photos a day. The team remained relatively small and they added very few new features, instead focusing on improving the “core product”. By January 2012, the application surpassed 15 million registered users; this number was nearly doubled two months later when it reached 27 million registered users (Markowitz 2012).

Facebook purchased the company in April 2012 for $1 billion USD in cash and stock (Clifford 2018). At the time of the acquisition, they had 13 employees and 30 million registered users. One week before the sale, Instagram received $50 million USD in funding and a $500 million USD evaluation (Parrish 2015). According to Systrom, they agreed to sell the company because with only eight employees at the time of the offer, they were “struggling to keep the site up”. As part of the deal, he would retain his position as the chief executive officer (CEO) and the company would be run independently from Facebook (Recode Staff 2017). The acquisition gave Instagram the resources that it needed to grow. The team “continued to change and improve the app”, adding new features such as the ability to share videos, post stories and go live (May 2017). Systrom and Krieger remained at the helm of the company until September 2018, when they announced that they would be leaving after eight years “to explore [their] curiosity and creativity again”. At the time of their departure, the company had over a thousand employees and one billion registered users (Systrom 2018).

It is not uncommon for an Instagram user (or “Instagrammer”) to become extremely popular on the platform (Latiff & Safiee 2015). Their popularity is usually determined by the number of followers that they have. This number is significantly more than the average user, who’s following consists mostly of friends and family members. These users, which are often referred to as “Instagram celebrities” (Yeru 2019), can gain upwards of one million followers on the platform (Latiff & Safiee 2015). They can even rival the amount of followers that traditional celebrities have. According to Tanya Yeru, however, they cannot be compared to them due to the fact that they are “systematically different”. While traditional celebrities are “products of mainstream or conventional mass media”, Instagram celebrities are users “who voluntarily turn themselves into media content through user-generated-content to become a celebrity” (Yeru 2019).

Instagram celebrities can be further separated into two different categories: ascribed and achieved. Ascribed Instagram celebrities are users from “traditional celebrity descent or families who have not been exposed to conventional media”, as well as users who are considered to be physically attractive or charismatic by the general population. In comparison, achieved Instagram celebrities (which are usually referred to as “influencers”) are users who “have an influence on their followers”. This category also includes ordinary users who post content that attracts attention from the public. In general, Instagram celebrities have been described as “active and creative users” that use the application to achieve specific goals. According to Yeru, these users “pay more attention and invest their time and energy in producing content” and “pay attention to interactivity with their followers”. As a result, they are often viewed as “making an effort to create a personality and audience” on the platform (Yeru 2019).

Traditional celebrities, on the other hand, use Instagram as a promotional tool to support their pre-existing popularity in the mainstream media. Film actors, for example, can use the application to promote their latest films by uploading theatrical posters or movie trailers (Yeru 2019). Actor Dwayne “The Rock” Johnson, who is one of the ten most followed people on Instagram, received $1 million USD to promote his movie Red Notice on all his social media accounts, including Instagram (Schulman 2018). In addition to posting content related to their professional careers, celebrities can also post photos from their everyday lives to help “create an intimate relationship with their fans” (Yeru 2019). For instance, after Kylie Jenner posted the first picture of her daughter Stormi in February 2018, it became the most liked photo on the platform. It received a total of 14.1 million likes in the span of 24 hours (Fisher 2018) and remained the most liked post on Instagram until January 2019 (Taylor 2019). Celebrities can also increase the bond that they have with their fans by going live on Instagram Stories and interacting with them in real time (Yeru 2019).

Due to its immense growth and popularity, Instagram has very quickly become a crucial player in the realm of digital branding and marketing. Digital marketing does not come without its challenges, however, due to the fact that the application lacks not only a physical store, but also extremely common e-commerce features, such as viewing objects from different angles and zooming in or out. This requires that brands and businesses take extra precautions when it comes to marketing their products on the platform. One prime example of this would be the use of filters. While they are often referred to as one of the most “outstanding features” of Instagram, business operators should rarely use them because the colours represented on photos need to accurately match the real product as closely as possible. Therefore, the only editing that businesses should be partaking in is enhancing the lighting and brightness on the photographs (Latiff & Safiee 2015).

The actual cost of marketing on Instagram varies, as the company has no set fee for digital advertising. Instead, businesses must create a “bid” for their ad’s placement and the highest bidder will receive their desired advertising spot. According to the Influencer Marketing Hub, however, this process is significantly more complicated due to the fact that companies can not guarantee that their advertisement will be accepted and displayed to the accounts that they bid on. Brands and businesses could pay anywhere between $0.20 and $2.00 USD per click (CPC) on an Instagram campaign. If they would rather focus on impressions and run their ads on a cost per mille (CPM) basis, it would cost them around $5.00 USD per every 1,000 visitors. An analysis of the cost of Facebook and Instagram advertisements, produced by AdEspresso in 2016, found the average advertising cost on Instagram to be $0.70 USD, which was exactly double the average cost to advertise on Facebook (“How Much Does it Cost to Advertise on Instagram?” 2019).

As Instagram is based entirely on the idea of sharing content, it greatly encourages what is referred to as “online word-of-mouth”. According to Latiff and Safiee, its strength is “undeniable” because “people talk and people love to hear even more”. The platform makes use of this by providing its users with the ability to tag the username of a business account (or any type of account for that matter) to notify potential customers of a product, brand or business that they may be interested in. This could encourage a user to browse through the seller’s Instagram account or to follow them, which could lead to an “indirect[…] boost” of the company’s growth. Due to the fact that people enjoy sharing their buying experiences, past and present customers can also share their opinions of a particular product, which could help future customers make an informed decision on whether or not they want to purchase that product or even do business with that company. Under these circumstances, it is extremely important that business owners strategize on how to get online word-of-mouth to work in their favour to boost their sales (Latiff & Safiee 2015).

Brands and businesses can also use the popularity of certain Instagrammers to their advantage by asking them to advertise their products on their account for a fixed fee (Latiff & Safiee 2015). Some social media influencers handle this on their own, while others hire social media agencies to help them with the process. Chelsea Naftelberg, the associate director of Attention, says that her team charges a base rate of $1,000 USD per every 100,000 followers. They then adjust the price up or down depending on a variety of factors, such as engagement rate, length of the campaign and the client’s budget. Henry Langer, the lead account manager for Hypr, suggests that businesses should start with a fee of $250 USD per Instagram post for influencers with less than 50,000 followers. From there, he says that they should expect to add approximately $1,000 USD for every 100,000 followers (Chen 2017).

High-profile celebrities cost brands and businesses significantly more money for these posts, which are appropriately called “sponsored posts” (Chen 2017). Kim Kardashian West, for example, reportedly charges over $250,000 USD for a single post on the platform (Chen 2017). While her mother and manager Kris Jenner has refused to confirm an exact figure, she has said that the fee is “definitely six figures”. She also revealed that her family charges different prices for posts, stories and Facebook and that “the price goes up if it’s a pharmaceutical product” or “something that you’re going to drink, or ingest, or put on your body” (“Kris Jenner as the force behind a family empire worth billions” 2019).

One of the major benefits of choosing a traditional celebrity to advertise a brand or business is the fact that they are among the most-followed accounts on Instagram. As a result, the sponsored posts will reach a much larger audience. Celebrities have also been considered, for many decades, “to be credible sources in generating a positive word-of-mouth regarding particular products and services”. More recently, however, research has shown that consumers are more likely to trust the opinion of someone that they know than a celebrity. This has caused many companies to choose influencers to advertise their products instead of celebrities, despite the fact that they tend to have a much smaller audience. To remedy the situation, celebrities have been posting more personal photos on Instagram and interacting more frequently with their fans. According to Jantien Wijnen, “this makes them more similar to social media influencers”, which causes companies to “still be interested in sponsoring [them]” (Wijnen 2019).

While most sponsored posts promote specific products and services, there have also been cases of individuals being paid to promote specific geographical locations, ideas or ideologies (Pöyry et al. 2019). For example, the Ministry of Jerusalem Affairs (with additional assistance from a private donor) allegedly paid actress and singer Demi Lovato $150,000 USD to be baptized in Jordan and to post pictures from the trip on her Instagram account. Her trip was met with extensive backlash from the public, as it was seen by many to be a political statement in regards to the Israeli-Palestinian conflict. Lovato defended herself against these claims, stating that her time in Israel was meant to be a “spiritual experience” and not a political statement. She also denied receiving any money for the trip, insisting that she “accepted a free trip to Israel in exchange for a few posts” (Spanos 2019).

According to Mario Peshev, the CEO of DevriX, influencer marketing is growing significantly faster than digital advertising (Peshev 2017). This becomes evident when you take into consideration the fact that this type of marketing made $1.7 billion USD in 2016 and is currently expected to reach $6.5 billion USD by the end of 2019 (“The State of Influencer Marketing” 2019). While these figures take all social media networks into consideration, Instagram is by far the most influential, as they have an average engagement rate of 3.21 percent, compared to the 1.5 percent across all other platforms (“Full Year 2015 Influencer Benchmarks Report” 2016). Accordingly, companies are now devoting a large portion of their budgets to influencer marketing (Latiff & Safiee 2015).

Sponsored posts are a huge benefit to brands and businesses due to the fact that there is “no third party involved, no fancy media or agency budget needed”. Influencer marketing also provides them with a “direct connection” to the user’s followers after a photo is posted. If an individual comes across a brand or product that piques their interest, he or she will be able to quickly reach the seller’s account. This “direct connection” makes it extremely important for businesses to do research on who their target audience is. They should identify at least one Instagrammer whose popularity will not only help make their company known to the public, but also enable them to connect to like-minded consumers that will purchase their products or services (Latiff & Safiee 2015).

A prime example of such an individual is footballer Cristiano Ronaldo, who is the most followed person on Instagram (Brown 2019). According to Scott Tilton, the co-founder of Hooki, he is “one of the top influencers on the planet”. This is due to his ability to leverage “his social following and engagement into a media powerhouse to drive tremendous value for his sponsors”. For instance, Ronaldo’s social media posts in 2016 generated nearly $500 million USD in media value for Nike (Badenhausen 2017), a sportswear company that also happens to be the most followed brand on Instagram (Sánchez-Torres et al. 2018). That year, he posted a total of 1,703 times across all of his social media platforms (including Instagram), which generated 2.25 billion social interactions. The company was referenced or its iconic logo was present in 347 of these posts, which had a total of 477 million interactions (Badenhausen 2017). Ronaldo made more money from his Instagram posts in 2018 than he did for playing football, generating $47.8 million USD in revenue. As a result, he is widely considered to be the application’s highest-paid influencer (Brown 2019).

While sponsored posts can be beneficial to both businesses and celebrities alike, they do not come without criticism. Activist and actress Jameela Jamil has denounced the Kardashian family on several occasions for promoting products on their Instagram accounts that “contribute to harmful body image stereotypes” (Gonzales 2019). Such products include Flat Tummy teas, HiSmile teeth whitening kits and appetite-suppressing lollipops (Chozick 2019). Fans have also criticized Kendall Jenner, a member of the family, for her “dramatic” Proactiv ads (Gonzales 2019) and her promotion of the Fyre Festival, for which she was paid a reported $250,000 USD for a single Instagram post (Chozick 2019). West has defended her family’s sponsored posts, chalking them off as simple “business decisions” (Gonzales 2019) that do not require them to be away from their children (Chozick 2019). In recent times, however, these ads have become a more personal endeavor for her, as she is using the money that she receives to help prisoners pay for “simple legal fees that they just can’t afford”. Taking this into consideration, West now accepts some paid advertisements that are “a little bit off-brand” for her (Kessler 2019).

Another major criticism of sponsored posts is when Instagrammers fail to disclose the fact that they were paid to post a particular photo in the first place. In August 2016, Truth in Advertising, a non-profit organization (Rath 2017), found that the Kardashian family had over 100 Instagram posts that violated the Federal Trade Commission (FTC) endorsement guidelines, which states that “advertisements must be clearly labeled” (Close 2016). The FTC reached out to social media influencers for the first time in April 2017, sending out 90 warning letters to individuals that failed to comply with these guidelines (Rath 2017). According to the organization, Instagrammers have to let their followers know that they are being paid for a post by putting hashtags (such as #ad or #sponsored) in the caption (Bloomberg News 2017). The FTC noted that some users were using less intuitive hashtags (such as #sp or #partner) to signify their relationship with a company (Rath 2017), while others were failing to make mention of it altogether due to concerns of appearing inauthentic. Several months later, Instagram unveiled a new feature that gives users the ability to tag a brand or business in their posts. If the company approves of the relationship, a “paid partnership” tag will appear at the top of the post (Bloomberg News 2017).

Due to its growing popularity, film studios and casting directors are putting a lot of emphasis on the number of followers that actors have on Instagram and all other social media networks. Studios are now more likely to take this number into consideration when it comes to casting a role than an individual’s previous work experience. They are seeking actors that are also influencers, especially for projects on digital-only platforms, such as YouTube Red and Facebook Watch. As a result, a less experienced or talented actor may get a role over someone that is more qualified for the job (Schulman 2018). Actress Sophie Turner has openly admitted that this was the case for one of her acting roles, where she was chosen over a “far better” actress due to her large social media following (Telegraph Reporters 2017). Sarah Clark, the owner of Compass Casting, said that this happens because producers want “built-in viewership”. She further elaborated that it is “hard to fight them” when they say that he “has 5 million followers [and] if he promotes [the project] at least 100,000 of those people will see it” (Schulman 2018). Casting director Mike Fenton has echoed similar sentiments, stating that “if it came down to two professional actors, one of whom had great visibility in social media and one who was barely recognizable, we’d go with the one who could get the numbers” (Furness 2016).

Generally speaking, the pressure to be popular on Instagram affects more women than men. According to actress Kristen Dunst, male actors are able to “get away with” not having an account, while their female counterparts are expected to be extremely active on the platform because “it’s just part of the game” (Pavia 2017). A friend of actress Gemma Arterton, for instance, was told that she needed to post more photos of her food and outfits on Instagram to increase her popularity and her chances of being hired (Furness 2016). While Dunst has accepted the “insane” reality of being cast based on your number of followers (Pavia 2017), Arterton has “refused to play along with the promotional strategy”. Instead, she has chosen to produce her own films about “women’s place in the world” (Furness 2016).

Casting agencies and producers are also using social media networks like Instagram to discover new talent. Casting director Jen Rudin told the New York Post that rather than “going to acting showcases, meeting with trusted talent agents’ newly signed clients, scouring trades like Variety and the Hollywood Reporter, and watching demo reels”, her job now revolves around viewing an actors’ website, Instagram account and YouTube page. According to Rudin, this makes the process of casting easier, as agencies are now able to watch potential stars online and then they can “decide whether or not [they] want to have them come in and audition” (Schulman 2018). This was the case for Henry Golding, who was discovered on Instagram and asked by director Jon M. Chu to audition for his film adaption of the novel Crazy Rich Asians. Golding, who had no prior acting experience, went to see an acting coach and then filmed his first audition tape, which was described by the director as being “too serious”. Chu told him to just “be [himself]” and a week later, Golding sent in a second video and was cast as the lead role in the film (Roeper 2018).

While this may have made the process easier for casting agencies, social media casting has been met with a significant amount of criticism, particularly from already established actors. During a reception for British Academy Award winners, actress Emma Thompson told guests that one of her main concerns about social media is that “we’re casting actors who have big followings so the studios can use their followings to sell their movie”. She further elaborated that “actors are becoming attached in [a] business way to their social media profiles, and I think that’s a disaster”. Actor Michael Caine shared similar sentiments, criticizing the fact that young actors are cast in “a little part on television and everyone knows who they are. They can’t really act”. He also condemned the new generation of actors being hired through social media for choosing their career path for the sole purpose of being “rich and famous” (Telegraph Reporters 2016).

Despite the criticism, Hollywood managers are still strategizing on how to turn their already established clients into social media stars. In doing so, they often encourage their “less-experienced” clients to maintain private accounts “until they’re ready to use them as full-blown branding tools” (Schulman 2018). Actress Elizabeth Olsen, who created a secret Instagram account in 2016, is a prime example of this. She made her profile public a year later, telling The Los Angeles Times that “[she] was only hurting [her] opportunities by not participating” in the platform. She further elaborated that she views the application as a “brilliant opportunity” financially and noted that she would love to be a brand ambassador because working with different brands or businesses can “help people recognize your face and then they go see your movies” (Johnson 2017).

While it is evident that an individual’s amount of followers has become an indicator of his or her popularity, it is important to note that not all followers are legitimate. That is, an increasing number of influencers are purchasing fake followers to make themselves appear more popular than they actually are. Cheq, a cybersecurity firm, estimates that these fake followers will cost companies $1.3 billion USD in revenue in 2019. This is due to the fact that they are “paying extra to reach people who don’t exist”. Brands and businesses are aware of this and are taking extra precautions to prevent themselves from being scammed. They are making influencers sign contracts that say that they “haven’t participated in comment pods, botting, or purchasing fake followers”. They also use online tools to “sniff out counterfeit or fraudulent accounts—and influencers who profit from them”. Examples of fake profiles include accounts with no profile picture or accounts that follow 10,000 people and have zero posts. Due to an increased complexity in the creation of fake accounts, the best way to spot them, however, is by “taking note of the rate at which an influencer acquires followers” (Ellis 2019).

Instagram has come a long way, from its humble beginnings as Burbn to its acquisition by Facebook just a few years later. In nine short years, it has completely redefined how much a picture is worth. While the platform was initially created to fill a void in the market, it has created an entire market of its own. The application has become a staple in digital marketing and branding, casting in Hollywood and perhaps most importantly, our daily lives. As users of Instagram, all of the things that I mentioned in this paper affect us in some way or another. We are the people that are being “influenced” by influencers to purchase certain products. We are the ones logging into Netflix to binge watch a new series that stars that hot guy we follow on Instagram. While I believe that influencers can be a good thing for brands and businesses, I think that we, as consumers, need to remember that they are being paid to promote certain products or services. Therefore, we should do an appropriate amount of research and not just buy something because our favourite singer endorsed it on Instagram. There is a chance that he or she has not even used the product and only advertised it for a paycheque. It may seem like influencers have the power, but in reality, it is the consumer who has all the power.

References



Comment by Brandon Anderson

        Posted on: 2020-12-29 · 12:35 PM

Wow amazing



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