Instagram, a great place to make money

Mr Benjamin Lotan (left) and Mr George Sylvain (right) of Social Print Studio, which has an annual revenue of about US$1.5 million

Instagram, the picture-sharing application that Facebook bought earlier this year, has not yet figured out a way to make money.

But some of its users have.

These entrepreneurs have realised that they can piggyback on the popularity of Instagram, which has more than 100 million users, and create their own businesses, some of which have turned out to be quite profitable.

They join a long line of innovators who have found creative ways to build new services on top of existing sites and platforms.

Services such as Printstagram, for example, let people turn their Instagram images into prints, wall calendars and stickers.

A group of designers are building a digital picture frame for Instagram photos.

Some early users of the service are leveraging their expertise and sizeable followings and starting consulting agencies, advising big-name brands on how best to use Instagram themselves.

And others have simply realised that the app is a great place to post photos of things they are trying to sell.

Ms Jenn Nguyễn, 26, who lives in Irvine, California, has 8,300 followers on Instagram, where she posts images of lavishly made-up women who are wearing her brand of false eyelashes.

“When we post a new picture of someone wearing our lashes, we instantly see sales,” she said.

She is part of a wave of entrepreneurial Instagrammers who have transformed their feeds into virtual shop windows, full of handmade jewellery, retro eyewear, high-end sneakers, cute baking accessories, vintage clothing and custom artwork.

Those who want to sell things on Instagram have to resort to surprisingly low-tech tactics.

Instagram does not allow users to add links to their photo posts, so merchants have to list a telephone number for placing orders or hope their followers will type the Web address of their store into a browser.

Shoppers seem willing to put up with that hassle.

Ms Nguyễn said that during a recent holiday sale, she offered Instagram followers a coupon for 35 per cent off their orders.

That day, she said, she received 100 orders, about US$4,000 (S$4,800) in sales, up from her usual US$500.

In her photo captions, she mentions her online store and highlights products that are new or soon to be sold out.

Most of the people taking this sales approach are small-scale entrepreneurs and artists looking for another way to find customers for their consignment shops and jewellery businesses.

Hundreds of larger companies and big-name brands have accounts on Instagram but only a few have taken steps towards actually selling there.

Luxury retailer Bergdorf Goodman has posted photographs of women’s shoes and jewellery alongside telephone numbers for the store.

Instagram is a compelling medium “because a photo translates to any language”, said Ms Liz Eswein, one of the founders of Mobile Media Lab, a digital agency focused entirely on helping companies figure out their Instagram strategies.

“It’s easier to get lost in the shuffle on other networks” such as Facebook and Twitter, she added.

The mini-industries cropping up on and around Instagram are fuelled by the service’s explosive growth.

In April, Instagram had 25 million users.

Eight months later, it has quadrupled that figure and amassed more than 5 billion photos.

In October, the mobile service had 7.8 million daily active visitors, according to comScore, more than Twitter’s 6.6 million.

Both Facebook and Instagram declined to talk about how Instagram might make money directly.

But analysts suspect that Facebook will try to weave advertising into the Instagram app at some point, much as it has with its own app.

“We’re seeing a huge uptick in images in content marketing across the board,” said Ms Rebecca Lieb, an analyst at Altimeter Group, a firm that advises companies on how best to use technology.

“Marketers are moving away from written content and towards images and videos.”

It is not hard to imagine a case where some images on Instagram are paid for by companies and highlighted to ensure that users see them, she said.

“We’re already seeing that on Facebook and Twitter.”

Associate professor Kartik Hosanagar from the Wharton School of the University of Pennsylvania, who studies online commerce, said there was a new breed of “social research and development” emerging, one that lent itself to a tremendous but risky opportunity for opportunistic and creative entrepreneurs.

“The small guys take the risk and if they find something that sticks, the larger company can seize on it and take a cut,” he said.

“It’s hard to predict in advance but that’s the beauty and opportunity of a platform and why we see so many businesses built on other platforms.”

Mr Benjamin Lotan, 27, who runs a company called Social Print Studio in Berkeley, California, which sells Printstagram products, along with other things, said he was not taking chances with his business, particularly since Facebook is feeling pressure to become a more lucrative company.

Mr Lotan, who started his business early last year, said it now generates about US$1.5 million in revenue annually.

Although he said he was not too concerned about the viability of the company at the moment, he was planning to begin releasing products that were not wholly dependent on access to Instagram.

“We aren’t really nervous,” he said.

“But you can never really know.”

Source: New York Times


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