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Pinterest & Instagram: ‘Pin’ning hopes on ads & social commerce

Highlights
  • Ad recall from Instagram's sponsored posts was 2.8x higher than Nielsen’s norms for online advtg
  • Average order value of sales from Pinterest is USD 50 – higher than other social platforms
  • Pinterest orders from non-US countries have increased 130 per cent from 2013 to 2014
  • About 87 per cent of Pinners have purchased something because of Pinterest

Like that polka dotted dress on Pinterest? Want to sign up for vacuum packing for food the one you saw on Instagram? Enter the new age of social commerce. Social media is moving on from platforms to communicate and advertise to commerce.

In the recent weeks, two of the visual-based social media apps, Pinterest and Facebook’s Instagram, have announced ‘buy’ features incorporated within posts. With this move, call-to-action buttons will allow users to buy what they see and engage with brands in ways which is more than just about ‘likes’.

This move up to social commerce and better advertising features was expected for some time. Steve Blakeman, CEO APAC, OMD says, “It was inevitable that the likes of Instagram and Pinterest would ramp up their ad serving capabilities over time. I expect the same from the likes of WhatsApp, Snapchat and Periscope in due course.”

Buyable Pins have been launched in collaboration with a few US retailers at the moment and Pinterest has also tied up with Apple Pay for a secure payment method.

pinterest buy

Mr Blakeman thinks this move will get a positive boost from advertisers. He says, “Pinterest is wading into the world of e-commerce with a complement to their red ‘Pin It’ button with a new blue ‘Buy It’ one. They are saying that consumers will have access to millions of purchase opportunities almost immediately and can pay with their credit card or Apple Pay. This ability to link direct to buy has pushed the value of Pinterest to over USD 11 billion as advertisers grow increasingly optimistic about its role in consumer buying habits of the future.”

Instagram, on the other hand, is also testing direct-response formats on its posts which will allow users to take action directly from an ad on the app to sign up on a website, buy a product, or download an app.

instagram ads

Daniel Mourad, Kenshoo’s Southeast Asia Director believes that these recent technology enhancements demonstrate the increased diversification available to advertisers. He points out, “This diversification enables more targeting and experimentation for advertisers. We have seen a lot of movement across Asia recently towards ‘catalogue-isation’ whereby social platforms are putting inventory directly in-front of clients.”

Mr Mourad adds, “From my perspective, this shows the value of online inventory. Instagram and Pinterest can add more value to advertisers. Brand advertisers can continue to reinforce messaging, but also allow for direct publishers to sell online as the functionality gets released.”

Getting brands on the bandwagon
Advertising on these platforms has had success for brands so far. Across more than 400 campaigns measured on Instagram globally with the Nielsen Brand Effect, ad recall from sponsored posts on the platform was 2.8 times higher than Nielsen’s norms for online advertising.

The average order value of sales coming from Pinterest is USD 50 – higher than any other major social platform. Orders from Pinterest on mobile devices has increased by 140 per cent in the last two years, and orders from non-US countries has increased 130 per cent from 2013 to 2014.

Andy Radovic, Regional Director, Digital (APAC) Maxus Global says, “In an Asian context, social is really where consumers are spending the majority of their time, at the expense of traditional media. To date, it’s been a very Facebook-driven environment particularly in South East Asia, with more localised platforms present in places like China, Japan and Korea.”

Brands are always looking for ways to reach relevant audiences in interesting ways. As brands in Asia become more focussed on e-commerce and direct response, they will be able to leverage some of the new offerings both Instagram and Pinterest are now providing. Mr Radovic added, “They are not just offering a branding play, but are looking to connect to sale, which is what brands are really looking to drive in this region. Particularly with Instagram where usage in this region is high, I believe brands will be able to take advantage of the advanced targeted features, the carousel ad units which provide a deep brand engagement and the direct-response formats.”

Clients may use these new platforms for new product launches, cross-sell, upsell, whilst also pushing collection material of their own social advertising assets, Mr Mourad feels. He explains, “Some may start with niche product segments that have previously been untapped. It will also enable smaller advertisers to secure direct access to potential buyers and they may be able to adapt quicker than the larger e-commerce players.”

Instagram will make advertising available through an Instagram Ads API and Facebook ad buying interfaces over the coming months. According to Instagram, there are more than two million advertisers who actively use Facebook to market their business and it wants to leverage the best of Facebook’s infrastructure for buying, managing and measuring the success of ads on Instagram.

Mr Blakeman opines, “Instagram have been trialing hand-picked ads with selected partners for a while now. The difference with the new InstaAds API is that they will be locked into personal data gleaned from Facebook which means much more highly targeted ads beyond pure demographics. The ability to fine tune personal preferences is also a huge step forward which will completing reshape the Instagram experience moving forward. It will be fascinating to see how the 300 million users take to the new experience and whether they will baulk at having their previously pure environment invaded by ad content.”

Shopping – the next saga of social media
About 93 per cent of Pinterest users use the platform to plan purchases. Preetham Venkky, Head of Digital Strategy & Business, KRDS Singapore says, “Pinterest is an inspiration medium, while Instagram is an expression medium. Unlike Instagram where people create content, Pinterest gathers a collection of user’s favourites. These collections are important data for brands – because they indicate what the users actually want to buy.”

Pinterest sits at the cusp of Facebook and Google, feels Mr Venkky. He outlines, “While Google can monetise on the content it makes available, it cannot target users based on the content. Facebook, on the other hand, can monetise user behavior. But Pinterest understands user behaviour and content as well. It has the capability to target users with specific content needs. For example, Pinterest can point out exactly which customer would be interested in buying red heels, but both Facebook and Google will not have that data.”

Mr Mourad says, “Instagram has the user activity and growth. This could be due to the Facebook synergies, but I believe the ‘interest board’ in Pinterest will offer some interesting advertising perspectives for clients and will add competition to the market. Because of the sheer boom in user-generated content, Pinterest and Instagram will help a lot in the curation of that content. Followers tend to appreciate the style and approach, and would be keen to find out how they can get the associated products easily. By implementing click-to-purchase advertising, brands are cutting down the number of intermediaries and reducing the number of steps that a consumer takes in the search journey.”

Millward Brown’s research shows that 96 per cent users of Pinterest have used the platform to research and gather information. About 87 per cent have purchased something because of Pinterest.

The research also found that Pinners tend to use the platform as a planning tool during key life moments, big and small. In fact, active Pinners are 47 per cent more likely to be going through major events in the next six months, from getting married and buying a home to having a baby or planning a special occasion.

This is why the successful advertiser will need to link relevant organic content to paid creative targeting, Mr Mourad believes. He adds, “Pinterest’s ability to store ‘catalogues’ will prove valuable to small advertisers trying to target niche market or specific interest segments. Linking the virtual inspiration board to the relevant real ad inventory will be thought provoking and successful if done right.”

It’s all about visual storytelling
You buy what you see and like. So just like any shopping catalogue, the ads and product placements on Instagram and Pinterest have to be just right for brands. Mr Radovic explains, “The visual aspect of these platforms clearly appeals to brand focussed campaigns that want to provide a deep storytelling experience. With Instagram, I’m immediately thinking of the auto, luxury and travel categories. And with Pinterest, probably steering more towards retail as a big focus. I don’t believe a brand’s approach to advertising on these platforms would vary greatly, with the only caveat that these platforms attract a younger audience, so how they execute their campaigns may have a certain twist to it.”

Mr Mourad says, “Visual means less clutter. Advertisers need to be even more seamless and non-intrusive as possible. They also need to move beyond using social platforms as simply a customer feedback channel. It should reveal some other side or behind-the-scene story about the brand, rather than just replicating content from Facebook and Twitter. Brands also need to be more mobile in their content creation and optimisation.”

The ads on social platforms don’t look like ads but look just like the other content. Unlike banner ads, they are more like branded content. But it is important what the content focuses on, feels Mr Venkky. He opines, “Brands need to understand that the ads should not be product centric but storytelling centric. Like on Instagram which is famous for its image filters, most of the brands do not use them. This is why the content does not look as good on a platform where a stylised image is expected by users. Brands need to focus on the visual elements to get across a strong brand story on these platforms.”

The quality of images is important for brands to attract attention. Mr Mourad says, “The rise of Pinterest and Instagram means that brands need to focus on more eye-catching and stylistic images with minimal ad copy. Take a quick look at either platform and you can see that traditional stock images would look out of place and more ‘organic’ looking or natural images look much better.”

There is less competition in the social platform advertising market in Asia, Mr Mourad feels. He concludes, “There are great opportunities for companies across the business sector, and especially in retail, if it’s done right. From an overall market perspective, cross platform pollination will ultimately be the key to success. The ability for a marketer to target cross-device & cross-platform target will also be crucial.”

Shubhi Tandon

Shubhi Tandon is the Assistant Editor at Digital Market Asia. Fascinated by the evolving digital media industry, she has focussed on tracking developments in the Asia Pacific market since 2014.
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