What The New Instagram Algorithm Means For Small Businesses

Earlier this week, Instagram changed the way users view content and here is what the new Instagram algorithm means for small businesses like yours. Instagram updated its news feed algorithm to no longer show posts in chronological order, but to show posts that are more relevant to you. What the algorithm really does is sort and show content based on the likelihood that you’ll be interested in the content and engage with it, your relationship with the person who is posting, and the time of the post.

Basically, Instagram is copying its older brother, and will start to look a lot like Facebook’s news feed. This should come to no surprise, as Facebook owns Instagram. Kevin Systrom, a founder and current CEO of Instagram states. “On average, people miss about 70 percent of the posts in their Instagram feed, and the change is about making sure that the 30 percent you do see is the best 30 percent possible.” This is definitely true, but beware, the change also has to do with monetization.

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Why Instagram Made The Switch

Well it worked for Facebook, so why not do it with Instagram? Many people speculated about the switch when Facebook initially announced it, but it has proven to be an effective model.

Facebook’s user base has increased quarter after quarter, as well as the average time spent per user, per session.

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$5.8 billion in Revenue in Q4… That is how much Facebook announced it had accomplished, which is over 50 percent growth over the previous year. To continue on this profitable journey at the same rate, Facebook needs to create an incremental $2 billion in growth next quarter, and $3 billion in growth this same time next year. It is evident that yes, Facebook is about connecting people, but it is really about driving the top line. Growth is being driven by an increase in average revenue per person, not an increase in user growth. Long story short, Facebook cannot expect to continue at its current growth rate without reaching saturation.

Facebook needs to place huge importance on monetization in new untapped places such as Instagram. According to eMarketer, Instagram’s revenue was $600 million in 2015, and is forecasted to grow about 150 percent in 2016. If this forecast is accurate, this growth cannot be driven by new users, because that would entail that Instagram expects 600 million new users in the next year, hence the monetization of Instagram. This move has been coming for quite some time now, and not even marketers could deny its existence.

What This Means For Small Businesses

Social media marketing is a core component to any online marketing strategy. And although some brands rely heavily on this strategy while others don’t, we can agree that all brands have a social media presence in one way or another. But, attracting customers through social media has changed for better, and for worse, for small business owners.

Up until now, Instagram has been a great place to create content and tell your story through videos and photos, with little or no capital. Brands have been using this platform because it is the one that brands and consumers engage in the most. Once Instagram becomes monetized, the organic reach will be limited, just like Facebook.

This can mean one of two things:

  • You can feel sorry for yourself and give up on Instagram as a reliable way to share content.
  • You no longer have to be a part of the 70 percent of content that goes unseen every day.

This is a good opportunity to make sure your content is seen by every single one of your followers.

What Small Businesses Can Do With The New Instagram Algorithm

There is no doubt that this update will be beneficial to larger brands with bottomless pockets of cash, but small businesses that do not have that luxury can make the most of it.

Create Valuable Content: There is no secret sauce or magic wand to wave, the answer is simple. Create valuable content that people like to engage with with your sales process in mind. If you haven’t read about Customer Value Optimization process that is best starting place to take with your content marketing strategy. It is easy, if you are creating content that people are engaging with frequently, the Instagram algorithm will recognize this and make sure your audience doesn’t miss an update.

Average Life Of A Post: The half life of your Instagram post will increase. The average life of a post is currently 2.23 hours, but because of the new update, if a user finds your content valuable, it will be at the top of their feed whenever they return the app.

Post Videos: Engagements are not just about ‘likes’ and ‘comments’ but just like how Facebook measures video engagement. Instagram will look for things like how long a user pauses on a post, even if they do not engage in the typical manner. This means that even attention grabbing images to garner engagement within the measured metric. Try and make people pause just long enough (like watch a video) and you’ll have created engagement in Instagram’s eyes.

If your business relies heavily on Instagram to share creative content, you may want to readjust your strategy. While larger brands have the marketing budget to spend money on paid advertising on the platform (which was once free media), small businesses may not be so lucky. Look at the change with the positive perspective that you don’t have to stress out about your content being buried under hundreds of other photos posted by others.

If you are aggressively utilizing Instagram, customer acquisition is about to cost a lot more than just a perfectly edited photo. That said, look for creative and new ways to grab the attention of your market, and look at this update as a blessing, not a curse.
You are already ahead of the curve by knowing about the update and how it is going to affect your business and its marketing efforts. If you need some guidance along the way, you can request a free consultation with us. In 30 mins we will analyze your social media strategy and propose a scalable solution to staying on top.