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How Instagram's New Feed Will Impact Brands and Influencers

What does Instagram's new algorithmic feed mean for the platform's lucrative influence economy?
By
  • Kate Abnett

LONDON, United Kingdom — Back in March, Instagram announced that "in the coming months" it would implement an algorithm that, instead of ordering posts in users' feeds in reverse-chronological order, will order them based on "the likelihood you'll be interested in the content," using signals such as likes, comments and searches.

Instagram says that users miss on average 70 percent of their feeds, so the change will ensure they see the content that matters to them. The company also tried to reassure its 400 million users that they would be told when the feed was rolled out and that at least initially, no posts will be removed from feeds — they will just be shown in a different order.

Still, the announcement caused Insta-chaos. Twitter and Instagram were soon awash with angry posts from users, while bloggers and influencers, worried they would disappear from people’s feeds, flooded the photo-sharing app with posts asking followers to “turn on notifications” to receive an alert every time they post something new.

So, what are the influencers worried about?

For many influencers, Instagram has become a valuable revenue stream. In exchange for a fee, they promote a brand or its products to their followers on the platform — in many cases, for thousands of dollars per post. However, influencers’ large follower counts will become less valuable if the new algorithm means they can’t guarantee how many people will see their content. Similarly, the new algorithm could harm their appeal to brands if it means the number of “likes” on their posts drops. While some influencers may try to combat this by paying for more followers — a practise that is common but rarely discussed — paid followers rarely result in meaningful engagement.

Karen Robinovitz, chief creative officer at Digital Brand Architects, says there is "potential" for the changes to affect influencer reach. Digital Brand Architects represents a range of Instagram influencers, such as Aimee Song (3.5m followers), Carly Cristman (126k followers) and Pamela Salzman (19.4k followers). According to Robinovitz, most brand-influencer deals are across multiple social channels, not just on Instagram, which will limit the impact of the algorithm change. "I think they'll still be able to get that reach through the aggregate of multiple channels," she says. "I don't think it's going to have a negative effect on [influencers'] business…. That content is so valuable and it rarely lives on just one platform."

Influencers' large follower counts will become less valuable if they can't guarantee how many people will see their content.

Harvey Alarcon, head of biddable media (including social media buying) at communications agency M2M, which works with clients including Calvin Klein, Longchamp and MAC, concurs that for brands, the appeal of influencers on Instagram is a more "luxury audience" of followers and "stronger, more impactful" visual content than on other social platforms, rather than reach (which, he agrees, is usually calculated across multiple channels).

Some influencers agree that the feed changes are little cause for concern: as the algorithm should prioritise good content that receives high engagement. "The anxiety and frustration around the change makes me feel like the people that are imposing that fear are ones who don't necessarily stand behind whatever they're putting out," says Leandra Medine, founder of the Man Repeller blog, who says she "[hasn't] really given much thought to the algorithmic change."

Medine whose Man Repeller Instagram account has 1.4 million followers, contends that if the content is good enough, followers who don’t see it in their feeds will visit the influencer’s Instagram profile directly. “The example I can give is if T Magazine stops coming with my Sunday [New York] Times once a month, I wouldn’t stop reading it, I would find it and go out of my way to find it,” she says.

Thus far, Instagram’s new feed has been rolled out to most users in Finland, Ireland, the Netherlands, New Zealand, Singapore and Venezuela. “To be entirely honest, the change hasn’t been as big as I expected it to be — yet,” says Sabrina Meijer, a blogger based in the Netherlands, whose magazine intoIT has 115k Instagram followers. “I have noticed that I sometimes ‘miss’ content from accounts that I follow avidly,” she adds.

One theory is that users will realise they can drive the content in their feeds by engaging with the type of content they want to see. “On one level it could potentially train the audience to actually actively like and comment more,” offers Robinovitz. However, “If it does the opposite then we’ll see a migration away from the platform,” she says. Indeed, it is in Instagram’s interests to reward hyper-engaged users: in March, post engagement on Instagram was 1.1 percent of total followers — down 60.7 percent from 2.8 percent in April 2015, according to Locowise, a social media analytics firm.

Still, for influencers who make money off their posts, creating content that generates high engagement will become more important under the algorithmic feed. Instagram is also reportedly testing business profiles and analytics that will enable users to learn the gender, age and locations (by city) of their followers. These "Insights," as the company is calling them, will include data on how a user's posts perform in terms of reach (the number of unique accounts that have viewed their posts), clicks on the link in their profile, and impressions (how many times their posts have been viewed, with the option to view the top posts by impressions over a seven and 30-day period).

Creating content that generates high engagement will become more important under the algorithmic feed.

Until now, Instagram hasn’t given users detailed analytics on how their followers are engaging with their content — meaning brands have had little to go on in terms of judging engagement on paid posts, other than “likes” or the number of followers. These “Insights” will mean brands can demand more rigorous analytics from influencers to justify their fees and calculate a ROI on paid posts.

According to Margaret Zhang, a brand consultant and blogger, who has 755k followers on her own Instagram, the platform is "not the most accountable when it comes to seeing a return on investment — it's really difficult to link a direct relationship between a spike in sales and a specific Instagram post," she says, cautioning that brands should not approach the platform as a "direct sales tool."

Zhang says she does not do sponsored posts or advertising on her own social media, but generates revenue through her work as a photographer and consultant. “I generally don’t encourage brands to engage in paying people for posts or multiple group influencer campaigns, just because it’s not effective,” she says, of her work consulting brands on their digital strategies. “You’re much better off paying for a still-life shoot with that money, posting it on your own channel so people are resharing it from your own channel and directing traffic back to you. That’s what consumers are hungry for: exclusive content.”

Until Instagram’s algorithm is rolled out, the best way to understand how it will work is to look at Facebook. Facebook — which acquired Instagram in 2012 — began experimenting with algorithmic newsfeeds as early as 2007. Since, the platform has consistently tweaked and changed its algorithm to suit the company’s priorities (for example, in March, the algorithm was updated to give preference to Facebook’s new Live video feature) — suggesting that whatever algorithm Instagram launches with won’t stay that way for long.

Brands will be able to demand more rigorous analytics from influencers to calculate a ROI on paid posts.

Facebook also pushes sponsored posts from advertisers to the top of users' feeds, decreasing the organic reach of influencers and brands and meaning that they have to pay to ensure their posts have the best chance of reaching their audience. Instagram is following Facebook towards this revenue play — in 2014, Instagram partnered with Omnicom Media Group (of which M2M is part) to enable the group's clients to roll out sponsored posts in users' feeds in the UK (following the US rollout in November 2013). According to M2M, updates to Instagram's ad capabilities announced last June included a minimum campaign fee of $30,000, which the agency acknowledged, "create[s] a huge barrier to brands."

Indeed, some view such changes as eroding these social platforms function as a "level playing field" where anyone could build up a huge following for free. "I think the changes will affect small businesses that are new to Instagram… as the algorithm makes it harder to get on top of someone's feed if you don't already have engagement or the money to buy ads on Instagram," says IntoIT's Meijer. IntoIT's posts — which include paid posts for brands — get an average of 590 likes per photo (for comparison, Chiara Ferragni regularly receives up to 100,000 likes per post, while most posts by Kendall Jenner generate over 1 million likes).

“It became a little bit more difficult to get in front of people’s eyes on Facebook as organically,” says Medine of the impact when Facebook switched to an algorithmic feed. She points out that Facebook has traditionally been about driving traffic out of the platform, whereas Instagram users consume content within the platform.

Influencers and brands’ fate on Instagram may already be sealed, says Harvey Alarcon of M2M, as the algorithm may reward those who have historically always generated high engagement rates on their posts. “Brands that have always done engaging content might benefit more than brands that are only recently getting used to the idea that strong content leads to better results,” he says.

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