Facebook announces acquisition of photo sharing application Instagram

Absrtact: In April this year, Facebook announced the acquisition of photo-sharing apps Instagram, priced at $1 billion, so high that Facebook had to think hard about how to use the vast majority of users to increase their advertising revenue. On the Mobile field, Facebook has not yet a

Facebook had to think hard about how to use the vast user base to increase its advertising revenue this April, when it announced acquisitions of photo-sharing apps, priced at $1 billion and Instagram.

In the Mobile world, Facebook does not yet have an operational, reliable business model. In February, Facebook announced that it would add sponsor ads to its mobile platform, but that it was still moving at a slow pace. Instagram apps can show bigger pictures than Facebook on mobile platforms and Web pages, and will certainly attract more advertisers. But even if Instagram has space to display large advertisements, Facebook will not risk interfering with the experience of the current user, and it is unwise to hurt Instgram users, nor does it conform to Facebook's style.

Yet the photo app offers several potential business models that are consistent with Facebook's past preference for using social networks to advertise. We are also trying to make a guess at the possible pattern of change:

1. Sponsor Brand Photos

Including brands like GE Electric, MTV, and Red Bull, have used Instagram to share photos, hoping to reach more groups that are not currently members of their Facebook fan page. An obvious business model would be for companies to pay for more people to reach their photos. Facebook may decide to place a pattern of sponsorship ads so that those users will only see them when their friends love an app or brand page. This also means that unless the user is connected to the brand, the vendor will not be able to pay for the user's homepage.

On the other hand, filters also give Instagram photos a special, different way of presenting ads. If Facebook allows companies to use Instagram to advertise their photos directly, it will not be too abrupt to cause users to resent it. This approach is a bit like Facebook.com's markup homepage AD, which does not require a social relationship to appear on the page, but in a different form, so the ad feels more like a service than a disruption to the user experience.

2. Sponsored user photos sponsored user-generated Photos

Many people use Instagram to share photos of their favorite products. Unlike Facebook or Twitter, where most of the users complain, photos on Instagram are usually the most positive messages on the brand. Like the above example of a user sharing Starbucks and Converse, Facebook can also allow advertisers to use such photos to advertise with friends of photo users, such as placing a favorite or attention button underneath the photo to expand the company's popularity.

3. Cross platform Advertising

Fecebook can also drive Instagram on the mobile platform or on a desktop Facebook state. The brand can pay Facebook a fixed amount of money to make sure that there are advertising pages every day, and that 75% of the people who see the ads within one months are the manufacturer's target consumer group. For example, MTV can share photos with Instagram, as well as share this image on Facebook. Make sure 33 million fans can see it on the opium walls.

4. Instagram cooperation platform

Similar to Google's model of acquiring YouTube, Facebook can also allow Instgram users to choose to become business partners and advertise their content. In contrast, these advertising partners will be able to contribute a portion of the revenue. Ads like YouTube are often stacked on video or before the video starts, and Instagram can use a location in the photo to drive sales.

Luminate is a company that currently offers photo users to make their photos more interactive and gives advertisers an opportunity to advertise in these photos. Facebook can work with the company and will buy directly to strengthen the photos taken by users. For example, a user can swipe a photo of a Starbucks mug and search for all nearby Starbucks locations.

The business model is more complicated than Facebook's push for a sponsor story, but it could be an interesting idea. Advertisers also pay a high price in exchange for a deeper talk about products or services from their friends. And like YouTube's ability to manifest itself, this partnership program may also bring cash flow to Instagram. Some data estimate that YouTube brought in 1 billion dollars of revenue last year.

In addition, Instagram can follow other photo applications, using a paid download filter. Like Camera+ is a 99-cent camera with photo editing application. Many photo editing features are free. However, a group of particularly popular filters are paid for separately, and many users think Instagram should do the same.

If Instagram can continue to launch a series of new filters for users to buy, should also be able to increase revenue. Let users feel the need to purchase each filter you eject. Create demand. 99 cents per filter, three filters for 1. 99 Yuan. It should not be a problem if people are willing to pay for it, because users are willing to give a little price to support a good product. Many times the founders felt obliged to explain openly and rationalize their own liquidity strategy. But Instagram does not need to explain anything, as long as the introduction of new filters to start making money, I believe no one will have opinions.