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Instagram Checkout and What this Means for Affiliates

Instagram Checkout and What this Means for Affiliates

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Pepperjam senior product marketing manager Katie Spurkeland runs through Instagram's Checkout tool and the benefits this could have for affiliates.

Americans are exposed to nearly 10,000 ads each day—content saturation that makes resonating with consumers in any meaningful way, a modern marketer’s Everest. 

Brands are overcoming this challenge by taking to Instagram where they can both control their own message while remaining accessible to their target market. And while Instagram is historically an engagement powerhouse, they’re shifting down the shopping funnel—headed straight for conversion—with the introduction of Instagram Checkout.

Eliminating steps traditionally taken between browsing and buying, Instagram Checkout introduces the opportunity to make in-app purchases through posts that include the shopping bag icon. The streamlined process caters to modern consumers who prioritise purchasing speed. 

As a curiosity of Instagram Checkout’s benefit grows among marketers, the tool will seemingly become a player for major industry topics:

Monetising authenticity

Influencers have that special sauce for authentically connecting with their audiences. This quality has both fast-tracked their evolution into accessible celebrities (on target to be a $10B global market by 2020) and solidified their place in many modern brand’s marketing budgets. The rub of how that special sauce becomes mutually beneficial to both the influencer and the brand is what makes advertising on Instagram so attractive (and lucrative) to both. 

Currently, Instagram Checkout is in a closed beta for select brands. If the tool were to be widely available for all business profiles, it’s safe to assume that the way brands and influencers collaborate will change—for the better. If the checkout tag were to capture metrics for compensating influencers, Instagram Checkout is the missing link for monetising the content that consumers crave, effectively arming content creators with another tactic to bolster their career—and, most importantly, creating a frictionless browse-to-buy experience for consumers. No longer will shoppers need to leave Instagram to buy, undoubtedly driving up the 53 daily minutes the average Instagram user currently spends on the platform. 

Resonating with younger audiences

Brands have long toiled with methodologies for tapping into younger audiences, facing a unique set of challenges such as crafting a cohesive cross-channel experience, brand scepticism and affinity for comparison shopping. Of Instagram’s 500 million daily active users, 34% are millennials — a group projected to have $1.4 trillion in collective spending power by 2020. Plus, they’re known for splurging on luxuries.  Additionally, an overwhelming 73% of Gen Z, a generation that already has up to $143 billion in spending power, reported that Instagram is their channel of preference to be reached regarding new products.

In short, a seamless checkout option for these groups overcomes brands’ challenges in meeting the shopping expectations of younger generations. 

Staying compliant

The FTC recently gained press for a crackdown on their Endorsement Guidelines which require unambiguous disclosure of payments or gifts associated with promoted products. By necessitating endorsement transparency, consumers are safeguarded from making purchases founded on inauthentic claims. 

Will an Instagram Checkout tag be deemed an appropriate disclosure of a product that they were obviously gifted or paid to promote? As the tool grows in popularity, this is something for brands to consider. 

Recognising attribution shifts

The investment into Instagram Checkout nods to the rising importance of social commerce in your shopping funnel. The platform has evolved from a place where users are introduced to brands into a commerce portal where consumers can snag their favourite products. 

Has this shifted officially migrated Instagram from top-of-funnel to the bottom as a closer? This change will enable Instagram to hit key performance indicators for brands like never before (think conversion rate and AOV), alter the traditional perception of goals within social channels and shake up the already non-linear shopping patterns of modern consumers.

Optimising affiliate marketing

Affiliate marketing has a deep-rooted reputation for getting brands the results they want at a cost that prioritises return on marketing spend. Through pay-for-performance, a payout only occurs when a conversion takes place making the model a fan-favourite channel for brands looking to acquire new customers. For traditional publishers and influencers alike, performance marketing is a simple way to gain direct access to brands, create a revenue stream and build long-term relationships. 

On the surface, Instagram Checkout ticks enough of these boxes to substitute today’s affiliate marketing tactics for Instagram. Most notably, new customer acquisition could be scalable within Instagram, as 70% of shopping enthusiasts turn to the platform for product discovery, according to Facebook. 

We can assume that once the tool is fully released, it will be available primarily to larger brands and influencers with giant followings. This potential lack of accessibility will hinder collaboration capabilities with micro-influencers, which have smaller, more engaged audiences, and brands that can’t access the tool. Both scenarios ultimately impact the consumer’s shopping experience and risk them turning to brand competitors. 

Further, if Instagram Checkout does become a hub for brand collaborations, it’s yet another channel that marketers will be responsible for managing. If Instagram builds the capability to utilise affiliate links within checkout, they set themselves up to be a resource for affiliate marketers rather than another channel requiring resources. 

Affiliate marketing will also remain a table stake in the digital marketing mix because of its distribution reach. While Instagram is a favourite platform for influencers, their content spans blogs, Facebook, Twitch, Twitter, YouTube, Pinterest and more—all able to support monetised content with affiliate links in some way. 

No matter what cost structure Instagram Checkout employs, affiliate marketing will remain a valuable component of monetising Instagram collaborations through stories, embedded links, profile storefronts or alternative technologies. Traditional publishers and influencers will both continue to utilize affiliate links to drive revenue—their primary goal—as the product evolves to meet their needs. 

Overall, real success will be dictated by the data produced in Instagram Checkout. In a metrics-obsessed world that makes data-driven business decisions, having a trackable point of sale within what is evolving into the world’s most popular social platform, could have a major impact on the way brands promote their products, the way affiliates drive advocacy and how consumers spend their money.

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Katie Spurkeland

Katie Spurkeland

    Employing years of self-curated digital shopping aptitude and a PR degree, Katie built performance marketing momentum for global brands, optimizing their affiliate strategies for several years before transitioning into Product Marketing. Her performance-turned-product marketing career makes her a seasoned vet in identifying and conveying digital technology value props to modern marketers, publishers and influencers alike.

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