I am working, I’m Instagramming.

A critical analysis into how Instagram is transforming the commercial ecosystem

Instagram has revolutionised the meaning and contribution social media makes to society, it is no longer a simple photo sharing device between friends and family. Rather it now supports an entire digital ecosystem of economics and culture that influences user perceptions and commerce structures within society. It has shifted traditional models of operation both in the business world and within social networks to create new opportunities for businesses and new career choices.Whilst this has created a new world of opportunity for a new generation of workers, it has also created difficulties surrounding its regulations and how it should operate in relation to traditional business models.

1.History:

As a social media platform Instagram has transcended throughout its historical development to shift the meaning of what social media could do with and for society. When it was release in 2010 Instagram was only open to select users but quickly transformed to the number one photography app in a few hours then by December of 2010 it became an app used by millions (woods, 2013). As the popularity of the app grew, as did its innovation and the app included developments such as hashtags, filters and high resolution all of these features came to revolutionise the purpose of the app and the way in which it was used by its users (Woods, 2013). Although hashtags, filters and photo resolution support eventually provided a structure to be seen and be seen well, which provided support to careers such as influencers, photographers etc, it was these early photographs by the platforms creator that set the trends which are prevalent still today. Mike Krieger was the first user of the app to post photos with the first photos including heavy filtering with artsy angles, food pictures and animal pictures (Bruner, 2016). These photos touched on trends that would still be seen today and set the tone for what photos would become key in developments that would lead Instagram to become a channel for not only communication but an advertising platform that would feature such photos to gain engagement, audience and sales.

 

npecca, 2016. Introducing Instagram for Windows 10 Mobile.https://instagram-press.com/ru/blog/2016/04/28/introducing-instagram-for-windows-10-mobile/

 

Ontarget, 2017. Instagram.https://ontargetinteractive.com/online-marketing-in-kansas-city-social-media/instagram/

 

 

Instagram has progressed from its original concept of being a platform of social exchange to now being a corporate entity responsible for being a pillar in the digital economy. Instagram has shifted how business is conducted within society and transformed its platform into a channel for corporations to interact and influence consumers both nationally and internationally. Instagram’s ability to incorporate marketing provided a new opportunity for the platform to expand into the corporate sector as it provided advertisers a new avenue to communicate to consumers (Phillips, 2017). By incorporating tools such as install now or shop now within their platform, Instagram became one of the first networks to establish an economically viable opportunity for advertisers to create posts that generated direct action from an advertisement (Phillips, 2017). It is through these tools that Instagram was able to transition from simply being a marketing platform to a conduit for commerce that actively contributed to economic activity for a firm (Phillips, 2017).

Moreover, Instagram has crafted a channel for commerce through supporting a new generation of careers rather than simply being an advertising social platform. Instagram has complemented careers in such a way that allows for workers to juggle two or more intertwined careers such as social media management and copywriting, supporting both the digital economy and the economy of the world through the diverse roles it provides (Munro, 2019). It is through the expansive network social media platforms, such as Instagram provide, that afford people with these employment opportunities not previously available through other traditional networks (Munro, 2019). Thus, Instagram has revolutionised the corporate sector of society where a job may not knock on someone’s door but it may land in their inbox (Munro, 2019).

 

Mary, 2020. Learn 14 ways to increase Instagram story engagement. Loinstagram.https://aloinstagram.com/increase-instagram-story-engagement/

 

Screenshot taken of Kelsey foremost (@Kelsey.Writes) Instagram 2020.

 

2.Economic and Cultural influence:

Moreover, Instagram has shifted the internet ecosystem in sectors including economics and culture as the platforms growth influences the direction of innovation. Economically, the platform has been able to shape the innovation created in the corporate sector that has opened up opportunities to stimulate economic growth. Instagram has inspired tangible products that have spun off the success of the photo sharing platform, it has created business opportunities for social media platforms that superseded the expectations of how much influence the digital ecosystem would have. It is due to Instagram that products such as Instacube and Projecto exist which are able to create a digital photo frame that displays your Instagram feed and a tiny projector for the photos (McHugh, 2012). Demonstrating here how Instagram is able to create an entire market that produces analytics and marketing startups (McHugh, 2012), opening up the potential that the digital landscape could have on the economy making Instagram and other platforms a modern and affordable way for businesses to generate economic interests (Garifova, 2016, p138).

Furthermore, the affects of Instagram on the economy have also extended into the cultural impact of which these platforms create in society. As Instagram as become a platform for economic interest, it has increased the consumerism within its users as they are targeted with pictures of logos and captions of “got new__ from the brand__” (Rinosa, 2013) which has influenced the culture created today where it has created a buy now or be left behind mentality. This is further emphasised with 72% of users admitting to making fashion or style related purchases after seeing them promoted on Instagram (Salpini, 2017). Demonstrating how the economic activity of Instagram increases as does its affect on consumer buying culture where no matter the purchase of $200 shoes or $2 gum consumers want to promote their materialistic wealth (Rinosa, 2013).

3. The transformative power of Instagram:

Instagram’s established service and strategic promotions of businesses and products have consequently transformed the make up of business models and increased the need to maintain an expansive network as it has become a prominent source of interconnectedness between companies and those who purchase from them.

Instagram has altered how business models function as the platform has created an interdependence between business success and their ability to be seen by. This is particularly evident within the business models of the fashion industry where Instagram has made itself a crucial component to any fashion brand that aspires to create any amount of success as Instagram offers vital resources companies need to integrate in modern society (Mau, 2018). Instagram has the ability to not only create effective advertising business models need but it is able to offer advertising not available in the traditional models of communication. Traditional models of advertising is no longer effective in reaching online consumers due to an increase in Adblock software as 142 million downloads is the software occurred (Veissi, 2017, p1).

Instagram offers an adaptation through its use of influencer marketing which offers business models a new and engaging way of promoting their products to consumers. Fashion brands in particular rely on this new form of advertising and have it heavily entwined within their business models due to its proven effectiveness of generating sales through an Influencers effective reach ( Veissi, 2017, p1). For example fashion brand Lord & Taylor used a total of 50 influencers to promote the same dress on Instagram and the result was a sold out dress within days (Veissi, 2017, p1). What this demonstrates is how Instagram has changed business models as companies, particularly those within the fashion industry, rely on being seen by many to generate the success required. Thus, Instagram has transformed how advertising is being used currently and how it will be used in the future as social media platforms revolutionise what it means to be seen.

Moreover, digital networks are changing the rules of business, shifting what it is you know to who you know. The leading organisations in the business world are now becoming network centric and are stimulating economic activity by capitalising on network advantages social media platforms such as Instagram provide them (Libert, 2016, p8). Instagram has provided businesses a way to co-create with their customers (Libert, 2018, p8), it is this network advantage that has changed what it means to have a successful business model as it is imperative for businesses to network in order to survive and thrive within the world of escalating digital networks (Libert, 2016, p8). Thus, Instagram has shifted how businesses need to thrive in the digital world as it is their dependence of communicating to and with consumers that help position the brand and generate enough sharing activity within these networks to capitalise search engine optimisation (Ahmadinejad, 2017, p85).

4.Regulatory debates in the micro and macro world:

As Instagram transitions from its old purpose of photo sharing towards a platform shifting the meaning of marketing today, the transparency of the purpose of posts must be disclosed as with any other advertising platforms. This has been a struggle for Instagram, particularly through its influencer marketing channels were transparency and disclosure have become second nature. As a result debates occur in order to develop policies and tight regulations globally and locally within the Instagram community to ensure everyone everywhere is held to the same standard of transparency.

With Instagram increasing its prominence in the advertising and marketing sector of the corporate world due to its effective outreach with consumers, it has sparked attention in relation to its policies that govern such advertising channels. With influencers becoming a main marketing opportunity for the Instagram community, the social media platform has begun targeting Influencers who do not comply with rules regarding disclosure for paid ads (Sukheja, 2020). This is a result of Instagram becoming a source of advertising as if it is to compete in the same market of promoting products to an audience similar to television and radio, then they too must have rules and regulations that bind them to transparency as other platforms are in order to protect consumers from fraud and manipulation. Otherwise if they are able to continue without the same binding policies then it sparks the debate of why other platforms are held to these advertising standards whilst Instagram is excused? To respond to these debates Instagram has started implementing plans to report influencers who either do not or inadequately disclose payment for an ad (Sukheja, 2020). The complexity of Instagram and what its networked change has brought to the corporate world can be seen on the flow chart below, where it has become a platform facilitating commerce channels that sustain consumers and require regulations to match.

 

 

 

These features will include a prompt that will require influencers to confirm hat they have received payment or not to promote these product or service before their post is published to their audience (Sukheja, 2020). This shift in regulation now means that it will be harder for users to post and advertisement on the platform without it be labelled as such (Sukheja, 2020). Such clear disclosure means that influencers must now create ads that are relevant and valuable to engage their audiences, matching the same amount of work and effort other platforms of advertising must do to persuade an audience to purchase their product despite actors being paid (Sukheja, 2020).

The developments of these regulations have been accelerated as it was discovered that 75% of influencers hide the #ad or #sponsored hashtags within their posts whilst only 13% of posts actually had paid partnership listed (Monds, 2020). With such a discrepancy it began debates on how long such an industry has gone unregulated and why it has been unregulated since its conception? When other forms of advertising such as television and radio have been bound to policies before its integration in society. Thus, as Instagram’s use in the corporate marketing sector continues to grow debates will continue to grow both locally and globally as new policies and regulations are likely to occur to protect consumers from being manipulated.

 

 

References:

Ahmadinejad, B. Asli, H. 2017. E-Business through social media: A quantitative survey. International Journal of Management, Accounting and Economics Vol. 4, No. 1, January, 2017 ISSN 2383-2126.https://courses.helsinki.fi/sites/default/files/course-material/4669853/4_social%20media.pdf

BBC, 2020. Social Media: How do other governments regulate it?. BBC News.https://www.bbc.com/news/technology-47135058

Bruner, R. 2016. A brief History of Instagram’s fateful first day. Time. https://time.com/4408374/instagram-anniversary/

Garifova, L. F. (2016). REALIZATION OF SMALL BUSINESSES ECONOMIC INTERESTS ON INSTAGRAM. Journal of Economics and Economic Education Research, 17, 133-139. Retrieved from http://ezproxy.library.usyd.edu.au/login?url=https://www.proquest.com/docview/1826877868?accountid=14757

Libert, B. Beck, M. Wind, J. 2016. The Network Imperative: How to survive and grow in the age of digital business models. Harvard Business Review Press.https://books.google.com.au/books?id=f4hZCwAAQBAJ&dq=Instagram+changing+business+models&lr=&source=gbs_navlinks_s

Mau, D. 2018. The rise of Instagram brands: How the platform is levelling the fashion playing field. Fashionista.https://fashionista.com/2018/05/instagram-fashion-brands-business-model

McHugh, M.2012. How Instagram spawned an instant economy. Digital trends.https://www.digitaltrends.com/opinion/the-growing-instagram-economy/

Monds, H. 2020. Instagram commits to stricter ad disclosure regulations. Tagger Media.https://www.taggermedia.com/blog/instagram-ad-disclosure

Munro, C. 2019. Is Instagram the new business card or are we just being obnoxiously millenials? Refinery 29. https://www.refinery29.com/en-us/instagram-replacing-business-cards

Phillips, K. 2017. Ultimate guide to Instagram for business. Entrepreneur Press. https://books.google.com.au/books?id=ww-dDgAAQBAJ&dq=instagram+changing+the+world+of+business&lr=&source=gbs_navlinks_s

Rinosa, M. 2013. 4 Ways Instagram has redefined teen culture. HuffPost.https://www.huffpost.com/entry/4-ways-instagram-has-rede_b_2500057

Salpini, C. 2017. Study: Instagram influences almost 75% of user purchase decisions. Retail Dive.https://www.retaildive.com/news/study-instagram-influences-almost-75-of-user-purchase-decisions/503336/

Sukheja, B. 2020. Instagram Targets Influencers who fail to disclose when they’ve been paid for posts. Republic World.  https://www.republicworld.com/technology-news/social-media-news/instagram-targets-rule-breaking-social-media-stars.html

Veissi, I. Influencer Marketing on Instagram. Haaga-Helia University of applied sciences.https://www.theseus.fi/bitstream/handle/10024/135448/Iman_Veissi.pdf?sequence=1

Woods, B. 2013. Instagram—A brief history. The next web. https://thenextweb.com/magazine/2013/06/21/instagram-a-brief-history/

 

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About Leah Chegwyn 4 Articles
University of Sydney Student studying Digital Transformations. Come read my posts as I navigate my way through understanding the complex processes that surround the media landscape.