I've long had a theory (maybe it's not that revolutionary) that part of Instagram's success is it allowed people a free pass to be vain and show off-y. On Facebook, it was a bit stigmatized to post a picture of an expensive purchase, amazing house interior, fancy vacation, or workout picture of your physique. However, it's the entire point of Instagram. Couple that in with all the brands and other accounts of inspiration for whatever you're into and you have a lot of reasons to open the app constantly.
Edit: Also worth pointing out that you could argue Facebook's infrastructure was hugely important to their growth. Instagram was literally almost anonymous profiles. However, once FB got everyone to connect their FB accounts (which they may have been able to do with only a phone number as I did notice this became a requirement), they gave advertisers and brands a lot off resources and tools (and reasons) to devote money and energy to the platform.
tl;dr — Every successful social startup should bend, but not completely violate, one or more social taboos, e.g. one of the 7 deadly sins.
Edit: When designing www.fwdeveryone.com, we purposely incorporated Pav's theory by building the platform around the taboo of getting involved in other people's relationships, in this case by letting people read (and reply to) other people's email conversations.
> Spotify allows consumers to binge on music for a flat fee, however it is crucial to note that the musicians in this case significantly lose out on revenue.
As a side note, it amuses me to see this repeated so often, given that it's not true. If you do the math, Spotify pays about the same as a radio play. You just have to remember that each radio play goes out to a few hundred thousand to a few million people each time.
The reason artists don't like Spotify is not because they pay poorly, it's because they pay fairly. When you get a radio play, it's assumed that all the people the station reaches listened to the song. Spotify knows exactly how many people listened to a song, and pay accordingly. Unpopular artists don't like this because they get accurate counts.
> Spotify knows exactly how many people listened to a song, and pay accordingly.
From what I understand, they actually pay based on how many times a song is played, which is not the same as how many people listened to it. If I only listen to an unpopular artist, but I don't listen as often as other people listen to popular artists (lower play count, even though it's still my favorite artist), nearly all of my subscription fee goes to the popular artists.
In the old days of purchasing music, it didn't matter how many times a person played the disc/track - it cost the same. You might argue that each play represents the marginal utility to the listener (and should thus be the basis for compensation), but I'm not sure that's entirely true.
> From what I understand, they actually pay based on how many times a song is played,
Yes, I should have been more precise. Just like with a radio play, the second play in theory goes to the same mass of people, but is counted again. So I should have said "they know exactly how many people and how many times it was played, and pay accordingly". I believe they discount multiple plays from the same person, to prevent abuse.
> In the old days of purchasing music, it didn't matter how many times a person played the disc/track - it cost the same. You might argue that each play represents the marginal utility to the listener (and should thus be the basis for compensation), but I'm not sure that's entirely true.
You might argue that, but you might also argue that when you bought a CD, you bought 10-15 tracks, even if you only wanted one or two. So again, for a consumer, Spotify is more fair, because you only pay for what you consume, and artists liked the old model where you paid for 15 tracks even if you only wanted two.
> You might argue that, but you might also argue that when you bought a CD, you bought 10-15 tracks, even if you only wanted one or two.
My same argument applies to a single track purchased via iTunes - it doesn't matter how many times you play it; it costs the same. The bundling of tracks on an album is something all artists did/do, so it doesn't affect the fairness question in my opinion (at least, not fairness between artists).
Spotify doesn't only replace the radio for me, it replaces CDs. I think on-demand plays should be worth more - and pay more - than ad-filled, ad-hoc, unpredictable radio plays.
I was similarly never willing to pay for HBO before on-demand streaming, but am willing to pay now.
One important difference is that, at least historically, radio play could actually stimulate the purchase of music so that you could listen to it at a time of your choosing (and without ads). Whereas, streaming on-demand music is increasingly a substitute for owning the tracks for a lot of people.
Again, this is something that is more fair to the consumer at the expense of the artist. The only reason you owned an album was because you couldn't listen when you wanted to, and were forced to buy it. Now it's better for the consumer, but not the artist.
Then we shall return to the times before the 19th century, when people created art because they loved art, not to get rich. I suspect it will lead to higher quality art, even if the quantity is lower.
What nonsense. I don't think there are many musicians today who don't love art. The problem isn't just being unable to get rich, it's being unable to afford to be a musician at all, and that was certainly not the case before the 19th century (there were plenty of paid positions for musicians).
I think artist will have to focus more on cultivating a strong fanbase globally and leverage it for merchandise and live performances. There is lots of money to be made being an idol.
Personally, I'm not totally sold on streaming music being better for the consumer although I do have a subscription. I like to own any music I really care about.
That said, it's an easy statement for me to make given that I was buying music on vinyl, then CD, then digital downloads before there was much in the way of streaming. So, even leaving aside the vinyl, I had a large collection of owned music before modern streaming hit in a big way. I still buy things every now and then but I have a large core of older music I care about--which is the bulk of what I'm interested in.
If you look at the numbers of how many people listen to radio I think this is a fair number. Each song on the radio is pushed to thousands and more of listeners at once on a station. The daily listener reach of big stations is essily in the millions. Spotify is a drop in the ocean compared to radio
While I think I agree with the premise of this article, these examples seriously undermine the argument. WhatApp because of greed? Spotify because of gluttony? Spell check because of sloth? This seems like an awfully long stretch.
The list in the middle of the article (Applications of the formula) is the original list from John Pavley's talk, the ones at the end are just the author of the blog post trying to give his own examples. But yeah I agree about WhatsApp, that's not a very good example. And MS Word isn't really social software.
^ Very true; piracy became huge because it was free (greed) and easy (sloth), but streaming services like Spotify and Netflix changed those dynamics; it made it easier and safer (sloth), at the expense of making it cost some money, but still not as much as taking a gamble on e.g. buying a CD would.
Of course, it came at the expense of artists, who aren't making as much off of Spotify as they did off of album sales. Well, not the top X artists anyway, I like to think that the artists that used to be in the long tail are now doing pretty well for themselves. Relatively.
re Piracy, its Pride -- for the technical challenge of getting something gratis. the fact it cost money ('greed') doesn't factor into it. Proud of the ability to acquire at no cost to the individual.
For me that's what it was - I gathered quite a collection of shit I never even used or played (apps, media), just because I could (before Napster). For the friends of mine with no technical chops who I taught how to pirate, there was no pride, it was pure greed.
Ha, that's a good one! Let other people read your email. LOL. Hypothetically, you would 'reduce friction' by not sending email to the service, instead just give it the keys to your IMAP server! And users wouldn't need to inform people who email them that their email is public, because once it's on their screen they could post a screenshot to the web anyways.
...oh wait, that's a real thing that you did. You just didn't put the http:// in your comment to avoid self-promotion.
After reading your examples (which are a really helpful way of showing what your service does, BTW - thanks for not burying that in a video or forcing me to sign up), I can see the appeal for your service. It's Instagram for email: In exactly the way I keep every photo my phone takes backed up and organized on Google Photos, but selectively post to Instagram, I could selectively send mail on a "social email" account and keep normal transactions private. Fascinating! I suppose I have a small portfolio of emails helping some people solve problems (running/cycling tips, local routes, etc and some tech support) that I have meant to post to a blog but just never got around to it. Making that blogging automatic would be neat!
Nice idea and implementation, I apologize for mocking it! I'll definitely keep the principle in mind.
> Hypothetically, you would 'reduce friction' by not sending email to the service, instead just give it the keys to your IMAP server!
We currently use read-only OAuth, so basically the same in terms of friction but easier to secure.
> And users wouldn't need to inform people who email them that their email is public
We actually currently require double opt-in permission for each message contributor in a thread to share stuff publicly. That might change in the future, we're still playing around with the model.
The new best practice with social apps is basically to launch while erring on the side of having too much friction for the app to be successful, and then keep successively reducing the friction for people contributing positively to the community. Otherwise you risk gaining a bunch of immediate traction but going into the death spiral of negativity, which is the main way that social startups die if they already have initial traction.
This wouldn't have worked ten years ago, but it makes more sense in a world where things take off more slowly anyway due to increased network saturation.
I think it could have been the other way around. Media and folks could have compared the growth of Instagram, which would have been a competing product with Facebook, and it could have given good mileage to Instagram, especially after the privacy fiasco and hate towards Facebook, Instagram could have been positioned as a Facebook replacement and there by shooting up it's value further.
The irony is that Instagram _still is_ thought of as a Facebook replacement. I saw several people in the past few months say something like "Hey fb sucks I'm deleting my profile you can hit me up by text, twitter, instagram, etc..."
Yeah, I think given their UI/model it is pretty difficult to have any long form discussion on Instagram. The "news" part of the newsfeed as always been FB's killer app. Or at least that and event planning, though I think it's not impossible for Instagram to develop a product around that.
I keep hearing (anecdotally, of course), that people are starting to prefer Instagram because long form discussions are more difficult there. They seem to be seeking an escape from the news.
Fair point about the event planning ... if FB were to cross-launch the sane event planning DB on instagram and whatsapp, I suspect that would be pretty much a killer app.
People in my circle of glass artist related accounts post a lot less politics on IG than FB. It is harder to repost articles, as well as have discussions as you noted (I think I lived through a week where IG was experimenting with adding threaded comments, though). I find FB’s curation of political posts to be poor and the venue to be an embarrassing one in which to discuss politics. So, I use IG when I want to connect with these folks.
The only "long form discussions" I frequently see on Facebook are bad political arguments. Most people don't really care what Uncle Billy has to say about millenials.
Agree on the event planning though. I think an Instagram Events would immediately get adopted by many young people.
Interesting, I've found Facebook's event management for large groups to be terrible. Our Jeep group has largely migrated from Meetup to Facebook, and the impact on event coordination has been largely negative.
For me, it's loading up Instagram and seeing just a bunch of interesting photos. Minimal memes, no link shares, and it's rare a comments thread that devolves into insanity.
I honestly feel stories are probably one of the biggest drivers of current growth. It's kind of cool to have a easy way to scroll through my friends and get an update of "oh, I guess Jeremy went on a hike; Monica is harvesting blackberries; etc"
I can't emphasize how important it is that companies like Snapchat and Instagram have made this such a big business. Remember when people would Tweet out with text that they were doing this? For example, your friend Tweets: "Wow, what a nice hike today!" The reason I give so much credit to Snapchat is they changed the way we do this. Why would I give you this kind of update in my life with simple text, when instead, I could actually take a picture? Snapchat got so popular because they took the boring Tweets people weren't getting much attention for and made people's trivial daily tasks that much more interesting for your followers.
Yeah, which is another reason they got rid of the chronological timeline. People were opening the app so often and frequently, they had to ensure fresh content. This way they can track which photos you've seen, and make sure to float to the top ones you missed.
Edit: All the points below are true too, of course. I do find myself subconsciously opening instagram a scary amount, so seems one reason to switch it up would be to always have fresh content. I do agree that once you get to where you last left off, you're likely to exit the app.
The real reason behind the non-chronological feed is to keep you longer on the app.
With a chronological feed, you remember where you left off, so when you scroll down to that point you know you’re all caught up and there isn’t more to see.
With a non-chronological feed, you end up scrolling down way more by fear of missing out, giving them the opportunity to show you way more cancer aka ads.
Your cynical explanation doesn't fit with the actual behavior. They sort it so things they think you'll like most will be at the top, but once you've seen everything, they don't change the order it again. If you always scroll down to where you left off, you will always see everything, and there won't be older content mixed in with the stuff you're seeing now.
Given a set of ordered posts you might see ACDB, then when you check in next you'll see HFGEACDB whereas in a chronological timeline it'd end up at HGFEDCBA, but once you've seen that out of order "DCBA>ACDB" section it stays in that order.
I think Instagram works because it's not as viral as Facebook. It's difficult to get into political flamewars. Also reposts and forwards look pathetically lame on Instagram, so people tend to post more original content.
For me instagram is facebook lite. I don't need the bloat of apps, rants, or links. I just want to see everyone's pictures. I got sick of FB long before the privacy scares.
Two people on my Facebook who went to Russia for the World Cup are basically posting photos from every game. I figure the games they haven't selfied are the ones they didn't buy tickets for.
> I've long had a theory (maybe it's not that revolutionary) that part of Instagram's success is it allowed people a free pass to be vain and show off-y.
It's a fact, not theory because facebook is where you are friends with mom, dad, grandma, and aunt suzie. IG is where you like hot women, fetishes, gucci bags, and whatever nonsense mom /dad/aut suzie might disapprove of. You keep up appearances on FB and get nasty on IG.
That's when I started using the word "instagram" as shorthand for "billion dollars". A while ago, Facebook bought Oculus for two instagrams. (It kind of makes sense: one for each eye in their VR headsets.)
Well it might have played differently. If Facebook hadn't bought it then Facebook would have competed against it and that's not an easy fight. Look at Snapchat.
Is Snapchat the best example? Snapchat is getting killed.
Also, as it was made that Instagram only had 7 employees when they were purchased, that's actually one of major reasons why the acquisition worked so well. 7 employees for an application of that scale is not "swift and agile", it's criminally understaffed. After the Facebook acquisition, Facebook was able to easily redirect some of their hires to work on Instagram which allowed Instagram's original workforce to actually be able to worry about things other than just keeping their heads above water. It's definitely not ridiculous to credit some of Instagram's success to the acquisition itself.
Isn't that exactly OP's point? FB might have counterfactually opted to bury Instagram rather than drop tres comas buying it. Conceivably this could have cost x < $1b. In that world, Zuck is a fool for wasting $1b - x dollars, rather than the one we live in where he's hailed as a visionary for making $99b off the deal.
If you're not pushing revenue (i.e. you don't need a sales team, ads team), you probably aren't going to need that many engineers to run something like IG. The original feature set was pretty basic, and it only ran on iOS for quite some time.
Yeah, but 7 engineers at that growth rate means your entire team is just going to be devoted to beating all of the scaling fires. That leaves little time for other product improvements that might enable more growth.
FB was pretty slow to monetize Instagram, and they still had hired 100s of people pretty quickly after the acquisition.
It’s quite possible to run a high-traffic app with a small staff if you have the right engineering talent and developed the infrastructure thinking about scale from the start.
Before facebook bought Whatsapp they only had 5 employees. But they had the best engineers for the task at hand. In fact they’re famous for handling 2 million TCP connections on a single server due to much of their engineering decisions (including choice of tech stack). And it’s not like they weren’t generating revenue. Before facebook acquired them, their $1 fee earned them $1billion the first 9 months.
And additional features are going to add massive complexity and decrease your ability to scale relatively quickly. Sure, with the right engineering you might be able to run a relatively light operation if you have a feature-set well thought out, but as soon as you want to add any other thing-a-mo-bob to the operation it gets much harder.
Also, they didn’t make close to $1B. More like 1% of that in the year before Facebook acquired them. If they actually made that much money they’d have more staff dealing with that.
WhatsApp had 50+ employees and made only tens of millions from their $1 fee. Where are you getting $1B from? It was never remotely close to $1B. FB publicly posted Whatsapp revenue from before the acquisition. It was a pittance.
Whatsapp also only had a couple hundred million users back in 2014. So they’d have no way to make a billion even if they charged everyone. Which they didn’t. They barely charged anyone.
I'm not familiar with IG's features except the filters. But to me it seems there is no new thing on it. So 7 engineers are probably all worked on scaling.
Similar to John Chambers, who used to run Cisco. He bought a tiny switching company called Kalpana (and a few others) for ~200MM back in 1994. Cisco dominated the switching market for a long, long, time as a result. It still accounts for nearly a third of Cisco revenues even today (~45 B total revenue in 2017).
or he just got very lucky. it only seems like he was "ahead of his time" because the story worked out - when you look at other acquisitions like say Oculus or Parse, I would argue it seems quite the opposite.
of course it is win, no one is saying it's not a win, what im suggesting is there is a much higher probability that MZ got really lucky than assuming he some sort of clairvoyant genius.
Whatsapp has over 1.5B users now. Facebook paid for it mostly with stock back in 2014. That was a solid buy.
Oculus while not a huge success was also only bought for a few billion. Not a bad loss. Parse wasn’t bought for that much. It might’ve not been a loss either.
When two of their bigger acquisitions are slam dunk successes or just successes, that’s a pretty good record.
To be fair, the whole thing could still prove to be the mother of all bubbles.
For one: we still don't really really understand network effects. There's huge value to being Facebook (you're forced to be there because all your friends are there and most nowhere else), but people also switch platforms for reasons that are not excellently understood. And when I say bubble I don't mean this or that company -- Silly Valley big money is basically all bet on network effects.
(I.e. Instagram is worth $100B under the premise that I can't build an Instagram killer (that actually kills it) in a short period of time. And jeez, it's not fundamentally different from Geocities + Frontpage, just has better UX)
It also depends on your investment timeline here. Facebook and other social media properties have historically traded at super low multiples compared to other companies with similar growth/profits. Facebook is trading at 15x it's projected 2020 earnings. That's extraordinarily low compared to any other tech giant. I'd say the risks of one-day being usurped are already substantially factored in.
I have to echo austenallred. Depending on the month, I’ll spend a similar amount on Facebook and Instagram ads and get good results from them. Instagram‘s ad platform and revenue keep growing at a crazy pace too. They are also the only two social networks I advertise on.
The point is that due to network effects (which lock users in to a platform), ads are monopoly-priced. But network effects are not super well understood and platform collapses do happen.
So we know the ads market to be large -- or at least people on HN are testifying to that effect, but we don't know that Facebook or MySpace or Lycos get to appropriate it to a long enough period of time that current valuations make sense on a no-bullshit NPV basis.
A fair point was made elsewhere that multiples (which are more or less like stock market folklore, but still allow for comparison across multiple industries) in these companies are relatively modest.
I run ecommerce right now on them in a similar amount.
Before I’d run different affiliate offers through them. Though back then for those, Instagram wasn’t that big. Might start again if the opportunity works out.
The returns are good or it would be crazy to put that much money into the ads.
> Say what you want about Zuckerberg but the guy was well ahead of his time and could see how things would evolve and what tick with people brains.
Did he really predict that, or did he just see an upcoming potential competitive threat and buy it?
I feel bad for the founders of Instagram. They could have been the next Zuckerberg(s) (as Instagram seems to be taking over as Facebook seems to be starting to fade), but instead they're subordinates in Zuckerberg's empire.
You "feel sorry" for two people in their mid-twenties who made anywhere from $100M to $400M selling their 15 month old company (while making the other 11 employees rich along the way.)
Ok. Beyond that, why do you assume the valuation would be exactly the same had they not sold to FB?
Exactly. To be honest Instagram's hypergrowth probably couldn't have been sustained if the company didn't end up getting access to some of Facebook's engineering talent and hiring pipeline.
Having 11 people try to manage a site of that scale is just asking them to keep doggypaddling to avoid drowning.
yea, nothing to feel sorry about. What could anyone do with a few millions (or billions more) if they are already rich by half a million.. unless you are trying to climb the Forbes leaderboard.
>if they are already rich by half a million.. unless you are trying to climb the Forbes leaderboard.
That would be half a _billion_ and, generally, I don't "feel bad" for people who don't attain their dream of climbing the Forbes leader board (assuming that is even a goal for these two.)
You should listen to the How I Built This podcast with Kevin Systrom and Mike Krieger. I think it's Kevin that said something like "I could keep doing what I'm doing the rest of my life. Work hard, build the company, but then what? At the end of it, I write a book about business? I want to enjoy my life". Definitely don't feel sorry for them, they met their goals.
Reading the discussion at the time there wasn't too much prediction required:
>A few days ago it was rumored to be valued at $500 million. A few months ago it was $300 million. Its last round — just a year ago — valued the company at $100 million.
The few days ago $500M round was just done because it was known Facebook was acquiring it. You can’t really count that. That was just VCs quickly doubling their money.
The other numbers are good, but then other companies also grow at similar rates. How come Instagram is the $100B valued company with 1B users and Whatsapp has over 1.5B users? And both are growing still. You’d think there would be another company coming at them.
For Whatsapp as a messenger the only service close to them is Messenger with around 1.4B users (you could say WeChat or Line/KakaoTalk as well though they are mostly popular in east Asia only). And Messenger is a sister product.
YouTube is a similar knock out success. Huge mindshare beyond its huge numbers, but it isn’t a profit machine like Instagram.
So it’s just Facebook that controls the 4 biggest social networks/messengers outside China. Along with some of them being the fastest growing services as well to this day.
All of this is to again say it wasn’t completely obvious Instagram would become this big. Other companies also grow and get valued highly quickly. And almost no other companies or services get as big as Instagram, which is still growing.
Finally, the zeitgeist at the time of the purchase was of shock at the price tag. Almost no one thought it was worth the billion dollar price.
> I feel bad for the founders of Instagram. They could have been the next Zuckerberg
Like Snapchat, you mean? The risk is that, failing to acquire Instagram, Facebook could have built a clone and turned their massive user base to it. Instagram could have been in a distant third place. We'll never know.
I am not sure if Facebook was already seen as the Pacman of social things. It could have been Google or MS (and had I been in the shoes of Instagram founders and reached for acquisition I would have had gone with Facebook: better long term perspectives).
Yeah. They should have gone for 5-10. I remember on one podcast, Kara Swisher was light-heartedly making fun if Kevin, saying "..He was crying..". Sort of like that. I believe it was a recode podcast
Facebook went public so they have a board of directors now, therefore I would assume Mark has to find ways to keep them happy as well. I would guess the general vision of Facebook is like most corporations, to make more money.
I think you're asking me to interpret my comment. Apologies if not.
The link I pasted simply had a list of Instagram's financing rounds.
April 5th, 2012, Series B $50m
April 9th, 2012 Purchased by FB, $1b
Several days before being acquired by Facebook, Instagram raised a $50m Series B on a $500m premoney evaluation, which gave investors 10% of the company.
Typically in order to grant 10% worth of preferred stock for a raise, the company has to increase the number of shares. If there were 100 shares prior to the raise, and a had 1, I would have 1/100 or 1%. If there are now 110 shares, and I still have 1, it's now 1/110 or < 1%
A few days later, the company was sold for $1b.
1/100 * 1b = $10,000,000
1/110 * 1b = $9,090,000
In my contrived example about dilution, with my 1/110%, I lost out ~$1m, and for seemingly no benefit to the company.
Bringing it back to my original comment, employees as a collective, would have lost out significant money, for seemingly no benefit, while Sequoia benefited tremendously.
I should caveat my post:
--This is pure speculation on a number of fronts. Any number of scenarios could be true (even if unlikely)
* IG could have had 10% shares already allocated in reserve for a Series B, and never had to issue more. Employees would still in effect lose out on money, but not because of dilution.
* With that $50m in cash, IG could have paid out hefty bonuses to employees. IIRC at the time of acquisition IG had ~19 people.
* IG could have issued anti-dilution to everyone, keeping relative % near the same.
* The SeriesB may have had to happen in order for Sequoia to agree to the sale.
I can see that as a possible scenario but without the real numbers of dilution, it might have not had such a significant impact. Nevertheless sequoia did made a bundle and that was paid either by founders or employees. There must be some sort of funny business in that deal.
>Advertising is a very legitimate way of making money
Yes, just not a way to make something that improves our lives.
Or even if you manage to make something that improves our lives, advertising is an incentive to pervert it and hold it back (e.g. you create a social network so people from all over the world can meet, then ads make you cripple it, force feed BS to them, milk them with spam, exploit their private data, and so on...)
I was able to build a legitimate business that improves people's lives. In order to make my product discoverable, I had to spend some money on advertising (not on Facebook in particular). There was no other reliable way to reach my target audience.
I have also bought many products from other businesses that have made my life better. In most instances, I have only become aware of these products because these businesses have spent money on ad campaigns.
>I have also bought many products from other businesses that have made my life better. In most instances, I have only become aware of these products because these businesses have spent money on ad campaigns.
That could have been a valid argument in 1970.
Today we have the internet. Instead of advertising it's not perfectly possible and easy to have other means of discoverability:
a) professional product reviews - a review site visit or Google search away
b) actual user reviews -- an aggregator site or Google search away
c) the product makers marketing material on their own website
d) blogs from people using the product
e) forums with people exchanging advice/complaints about the product
f) videos of people unboxing, using, showcasing, etc the product
g) the specs of the product, product manual, photos, etc online
h) online communities around a product category
i) for digital products, one could also try a trial/time limited/shortened /watermarked version of them
j) for products we encounter physically on some shop's shelves and want to know more about them, a quick Google search or QR Code can take us to the product page (and/or all of the above)
Unlike advertisement, none of these give an unfair lead to the maker than can spend more campaign money.
What's best, most of these add informational value (like scores, real world complaints, professional reviewing, etc) that ads, by definition, don't have.
We literally have more ways than ever to discover products, and to find the best products. Advertising is just random producers (random quality wise: just the company with the bigger pockets) shouting to make their wares stand out.
I like how you brought up all of those examples for means of discovery. However, I think that almost all of those are a form of advertising. Perhaps the forum where people are giving advice would not be advertising.
If any of these are on the internet, then people there will be pixel trackers, and people are going to measure the distinct number of impressions. I don't think this is a bad thing.
>I like how you brought up all of those examples for means of discovery. However, I think that almost all of those are a form of advertising
If we stretch the notion of advertising to mean "anything that can bring something to one's attention", then yes.
In that case I'm making explicit that by "advertising" in my first comment I referred not to these things, but to what's colloquially referred to as "advertising" -- namely paid tv ads, paid banners, sponsored posts on Facebook, and so on.
Not user forums, not legitimate reviews etc.
>If any of these are on the internet, then people there will be pixel trackers, and people are going to measure the distinct number of impressions. I don't think this is a bad thing
Well, I don't think "measuring the distinct number of impressions" in those kind of websites is a bad thing either.
What I said I consider bad is advertisements, that is getting money from a business for pitching THEIR message (as opposed to objective facts or a reviewer's/user's subjective review), selling your users' private info to them or using it to target them with ads, etc.
Let's imagine for a moment that it was made illegal for a content producer or social website etc to take money, in any kind of form, directly or indirectly, from any product maker, or anyone selling something (that is, no selling ads themselves, and no being paid to show ads).
What would remain on the web to discover products would be all the above I've described.
Kim Kardashian has a 110 million followers. After the Russians (or whoever...maybe just that "400 pound dude in the basement") get her to become the next president I am waiting to see what boywonder shows up and says to Congress.
We know what he and his exec staff thought about fake news before the election. Now who here thinks fake imagery is not a thing? Just take a look at the content produced by the top 100 accounts.
There is going to be a special place in history for the damage boywonder has done. People will have to invent new terms to describe it. Nothing like it has happened ever before.
The new term will be `zuckerbergism` if the whole thing can be pinpointed to him but I'd bet it's going to be something along the lines of `the social age`.
I am quite privacy conscious. I have deleted my FB account. On principle, I dislike targeted ads, user tracking, etc.
BUT, I hate to admit this, the ads I get in Instagram are the most relevant I have ever gotten. I actually look forward to them, to discover new products. They are perfectly tailored to me.
I'll be honest, I like ads that are relevant to the things I am interested in. I am no FB fan boy, but their ads are pretty good... I actually click on them.
Nothing. It's a win-win. Consumers get personalized, tailored ads. Businesses reach audiences that actually want their products.
What annoys me are ads for products I've already purchased (amazon is terrible about this), or the same ad plastered 20 times across multiple sites.
Instagram handles ads pretty well IMO. They are non-intrusive, easy to digest, and highly relevant.
Facebook OTOH, has become one giant scrolling, auto-playing, clickbait/video ad. There is essentially 90% junk to 10% information (posts/photos/etc). IG has the same ratio but in reverse.
People love to bemoan the horrors of internet advertising, but tbh I find it way less intrusive than other forms of ad placements (TV, radio, billboards).
Except autoplay vids w/ audio. Those should be banned flat out.
Ads aren't win-win. They're taking up the space of the content I want to see. Accidentally clicking on them sends some of my personalized data to who-knows-where.
They often run code not vetted by the site owner, making them a security risk. Getting a personalized ad is hardly a "win". It's like stepping on a piece of poop that is your favorite color.
(I'm fine with ad-supported products, but I see it as a necessary evil of the transaction, not as a win).
I mean, I would much prefer an ad-free world full stop - but that isn't likely to happen in my life time considering the amount of money in advertising.
You also have the option to fully block ads using extensions/plugins - nothing like that really exist for cable tv/radio/public spaces.
It is not a win for people who prefer not to be a “target”. I’d rather have irrelevant ads than targeted ads because one requires the harvesting of data about me and the other does not.
Yeah, they only show me stuff I would have wanted if I knew it existed, which for me is the essence of discovery. If it was limited to this and only the HQ stuff, not the I SEE YOU WENT TO WEBSITE SO HERES THEIR BANNER AD FOR THE NEXT MONTH stuff.
You're feeding the adtech privacy-invading world which has tons of negatives for society. As an analogy: "I shop at Walmart and find products I actually appreciate. What's wrong with that?" The answer isn't simple, and shaming individual consumers isn't a solution anyway.
Among the biggest problems with ads are that when they are the primary economic model for these services, they will tweak everything to favor paid ads as much as they can get away with. That means everything from conflicts-of-interest around serving the needs of the biggest advertisers to undermining organic (non-paid-ads) discovery of products and services…
Can you expand on this? I also can't really parse what your second paragraph is trying to say. How do businesses that rely on ads undermine organic product discovery, and what conflict of interests could they have?
Thanks for the open question. What I'm saying has at least these two elements (not counting tons of negative side-effects or the psychological harm that manipulative advertising causes):
1. Given capital being so unequally distributed, paid ads amount to amplification of the messages from those who happen to have money. In another framing: you see ads about mediocre products with a big marketing budget; you don't see ads about wonderful products that have little marketing budget.
2. The conflict of interest is where Facebook has an incentive not to highlight too much the non-paid posts from people that mention products that don't pay for advertising. If you were to consistently see non-paid posts that gave you all the info you need to get products and services you appreciate, then the advertisers wouldn't be seeing their ads pay off and might cut back on paying Facebook for ads.
Overall, attention is somewhat zero-sum. Your attention to one thing is not attention to something else. You never really know what you're missing. But in an ad-driven system, attention is biased toward (but not exclusively) whatever serves those things connected with ad money.
1. Products reliant on advertising for revenue are incentivized to increase the amount of ads shown (per user and in total). This leads to product strategy which prioritizes growth and engagement above all. The line between "highly engaging" and "addictive" products becomes very thin, arguably disappearing entirely.
2. In order to provide highly targeted ads, companies must necessarily collect, store and organize a tremendous amount of data on their users. We have seen over and over again that this data can then be requested, stolen or tapped by governments, hostile actors and other powerful organizations for nefarious purposes without the consent of the user.
1. All products are reliant on advertising. full stop. But even then, they are not incentivized to increase the total amount of ads per user, that would be inefficient. They'd prefer better targeted ads over more ads (point 2).
2. Source? Outside of a few edge cases (china) I don't think this is a real concern. The same can happen with financial (or any) data, but I don't see people saying the data is the problem. Rather its the processes around that data that need fixing.
1. Subscription products are not reliant on advertising. Payment technologies are not. Neither are ecommerce operations, or in-person services. Just because a firm can advertise their products does not mean it is reliant on advertising. A firm advertising is not the same as it having an advertising revenue business model.
Advertising revenue is ad CPM (how valuable the ad is and how well it's targeted) multiplied by ad impressions (which is why people measure page views, time on site, minutes watched, etc.) Both matter in the model.
2. Beyond China and other authoritarian governments, the Cambridge Analytica affair is perhaps the defining example of this. It showcased nonconsensual data harvesting with malicious use of the data against those users to impact politics both domestically and internationally: https://www.nytimes.com/2018/04/04/us/politics/cambridge-ana...
> "Central to the work of Americans for Prosperity is i360, the Kochs’ data operation, which profiles Americans based on their voter registration information, consumer data and social media activities."
The discussion is not about making the term "advertising" so broad as to be useless. It's not "advertising" as in "any way that people notice a product or service". We're discussing "advertising" as in specific messages that third parties pay to have shown to people whose attention has been gotten by a second party.
In other words, the topic is the advertising where you give your attention to one party and that party participates (gets paid) to show you something else different from what you went there to see.
So, concretely: this is about paid ads on Facebook. This is NOT about products listed on Amazon that show up with compelling descriptions when you search for that type of product and clink on a link that wasn't higher in the list because someone paid for that.
When you go to Amazon and search, you are specifically choosing to put your attention toward products of a certain sort and asking for information. Amazon is delivering that information. There's marketing in how the products present themselves, but it's still something you are actively looking for, given to you second-party by the company from whom you are considering buying the thing.
When you go to Facebook to see how your friends are doing and your attention there gets sold to advertisers to show you unrelated products that may happen to fit your interests, that is the topic of discussion here.
Absolutely nothing is wrong with that. That's the ideal of how it's supposed to work.
Lots of poor advertising methods have tainted the industry unfortunately but marketing is directly responsible for the success of every single corporation and the immense amount of content and information we all get to enjoy.
Ads displayed to me are never relevant. What is wrong is that you have no choice, they force you to watch ads even if you don't want to, or if you have disabilities, which literally sucks your life out of you.
If the time of a psycho dictator comes in and you match a profile of a person that need to be "cleansed", you could make yourself an easy target if government has got their paws on such database.
I haven't received any relevant ads yet but I have noticed that more and more ads are being shoved into my feed. It feels like there's an ad every 5 or 6 posts, it's a bit annoying, and I find myself checking into Instagram less often.
I wish I could pay a fee to get rid of ads and get a reverse chronological feed.
I do wish Twitter, FB, IG etc offered a no-ad subscription to users. Charge folks 3-4x the expected per-person revenue and it's a win-win, right?
The only thing I can think of that would make them not do this is that maybe the folks most likely to pay $15/mo not to see advertisements are the same folks advertisers most want to get in front of. Expendable income and willing to pay money for convenience and personal taste.
Yeah your second paragraph is the problem. Though more importantly, most people who can pay won’t be paying $10-20 a month for a service that is otherwise free. And now the service has to provide this paid tier to a tiny portion of their user base.
I've developed an unconscious habit of just scrolling faster past the ads. As my subconscious detects an add coming up next on the feed I just naturally twitch a little faster to skip past it.
I never developed this intentionally, it just sort of developed.
My point is, I suppose, that I've no idea how good the advertising is on my instagram account because I really don't see the ads.
I was targeted by an ad for those Gravity Blankets (as I'm sure many others were). I bought one as a gift for my SO. The whole time I was looking at the Gravity Blanket website, I was thinking to myself "dammit, they got me."
What I was even more impressed by is that after I bought one, I never saw another Gravity Blanket ad again.
I've never thought about that last bit until now. Do you think the ad targeting is being updated with actual purchasers on such a regular basis, or is that baked into whatever tracking cookie(s) were used, e.g. the FB pixel?
I don't use it, but I do think it's pretty cool. It's small, as a 6'1 male I would say it's just big enough.
My girlfriend uses it when she's having troubles sleeping, she says that it really does put her to sleep quite well.
However, she says that there is a bit of adjustment, when you wake in the night or in the morning, there is a slight moment of panic when you don't have your strength back and are in a sleepy haze, because you have a bit of trouble moving around. But you get used to that.
When you receive it, you have to tie the weighted insert down with cloth ties inside the washable cover. I wish there were more of these on the inside though, the weighted part of the blanket can get too out-of place for my liking, and I also don't trust the ties to hold up for very long if you're not careful moving it. It definitely takes two hands and a good grip to get the blanket on top of you.
After interacting with a post about yachting, the ad engine behind Instagram suddenty thought I am a multi-millionaire and I got a ton of ads on fancy watches, McLarens, Bentleys, and of course boats. Felt good for a while.
They've taken a long time to dial in for me. Initially, I received none, then ads that assumed I was female (I had my gender unset, but generally followed/liked fairly male things; yet received ads for menstruation underwear!), then ads that assumed I was Russian (I'm nowhere near Russia and can't speak/read any Russian; I follow one person who has a Russian background, but never interact with them). I've been on there for years and speak pretty openly about the things I like (travel, cooking, etc) - surprised it took so long to give me relevant ads!
It's because of the amazing data Facebook and Instagram have to create anonymous targeting audiences with. Source: I spend millions on FB and IG ads per month.
Is your product that bad that you have to spend millions on ads just to get people interested in it?
If I had to pay millions to shove my product in people’a faces because that’s the only way to get them to use it, I would reconsider whether my product should even exist.
Billions a year is their entire advertising budget, and a lot of it is print & TV advertising which is orders of magnitude more expensive than web. Not saying I agree with that either (I wish all advertising would just die in a fire), but it’s not as bad as the above.
The comment I was criticising claimed they were spending millions a month on FB & Insta only, which seems astronomical and raises some concerns about whether the product provides any value at all.
> raises some concerns about whether the product provides any value at all.
How? Spending on fb/insta is no different than print & tv. Air BnB ads are probably 5x as effective on FB than on a billboard, how does that say anything about their product?
Print & TV ads don’t stalk me everywhere I go nor steal my personal information so I don’t mind. They are also vetted by the publisher to weed out bad actors so there’s a low risk of scamming.
Vetting by the publisher at least sets a minimum bar that isn’t there with web.
I don’t see obvious scams, phishing or malware being advertised on TV or print, but I saw a lot of them back when I was on Facebook, and even reporting them didn’t do anything.
A budget of some number of hundreds of thousands per month is fairly common. People who work on multiple contracts like that are common, so people working on multiple millions of spend per month isn’t a strange thing at all.
Most companies do paid marketing. I’d also suggest there are probably many things that you think of as general promotion (events, sponsorships, talks, community engagement, more) which are in fact brand marketing, and that for most companies brand marketing is an inefficient use of funds compared to performance marketing.
You realize that they are likely making a profit on that millions in spend. If the product is so bad, that normally wouldn’t be possible.
You seem to have a very misaligned thought on why advertising occurs and why it works, especially for a relative small timer like the poster (since a couple million is a drop in the bucket for IG/FB).
You're going to get ads. To try to fight against the very existence of advertising is quixotic to the point of being sad. Why would you not want them to be relevant to you?
As a consumer, I would much prefer ads that are carefully tailed to my interests - software, fitness, general aviation - than see wildly different ads on the same platform, or the same 2-3 high paying ads for the latest garbage CBS sitcom. As a business owner, I would much rather pay $10-12 per click on one of my ads that is highly targeted to demographics, income, technology use, browsing history (of my sites, re-targeting etc) than pay $0.10 per click on a completely dumb ad with insight into who is actually clicking.
> "You're going to get ads. To try to fight against the very existence of advertising is quixotic to the point of being sad."
This idea is complete bologna in my opinion. People aren't trying to fight the existence of ads (e.g., movie trailers, magazines, sports ads on ESPN, maybe even the off native ad) -- people are fighting the invasive, predatory, and downright deceitful nature of the current online advertising model.
> "As a consumer, I would much prefer ads that are carefully tailed to my interests"
Don't we all want this? But when getting ads tailored to my interest comes with the price tag of having these exchanges/platforms follow me around for the rest of my internet life (or until I delete their cookies) -- the cost doesn't seem to be worth the benefit (to many, but obviously not all)
> "As a business owner, I would much rather pay $10-12 per click on one of my ads that is highly targeted to demographics, income,"
Of course. You've just exposed your vested interest in this topic. So it's not surprising that your personal opinion aligns with your business interests.
Not me. I’d rather no ads, but if I can’t block them I’d prefer irrelevant ads to targeted ads. They waste my attention equally, but one does not require the collection of my personal data.
> To try to fight against the very existence of advertising is quixotic to the point of being sad.
Yeah if this doesn't scream "astroturfing for an ad company" I don't know what is anymore.
Sorry, I'd rather keep up the good fight of being the owners of my attention. Pushing back against ads isn't "sad" or "quixotic" at all, and in fact should be celebrated.
Instagram listens to what you say around your phone to serve you ads. It's kind of fucked up. I would get rid of instagram
on my phone if it wasn't for all the quality memes.
To all the downvoters - are you saying instagram doesn't use your phone microphone to serve you ads? It definately does. It's happened to me countless times.
No wonder. Anecdotal of course, but I see my friends spending more time on instagram and people on the train or bus browsing instagram. I don't remember seeing FB on someone's mobile in the last 6 months.
It will only grow bigger and at some point when it becomes too big, you see less friends posts and more advts and people move on to something else. But for next 2 years, Instagram's going to be Yuuuge.(Huge)
If you travel to other countries (for me, Thailand most recently) you'll see almost everyone on Facebook. Most small companies over there don't even have a website, just a FB page.
At least in India and for me, it is exactly opposite. I never saw Instagram open on anybody's mobile. It is always facebook and whatsapp. Sometimes Twitter but never Instagram.
The amount of advertisement is already big. Constant interruption with sponsored stories, sponsored pictures, even "influencer" or anyone else who has more than 100k followers start using their images to advertise a product or a place.
I've regained a lot of mental peace once I quit Instagram. When you have hundreds of friends and follow other random people on the platform, you get the impression that every single person is always on a beach in Bali, eating at Michelin star restaurants, riding lambos and partying with attractive successful people in the most exclusive venues out there. All the while you're a corporate drone sitting in a cubicle all day, or you're stuck in traffic, or are dealing with a shitty boss, or you're trying to figure out how to pay rent.
In reality, those people don't have that lifestyle. They're simply marketers and FOMO generators, but our brains aren't super good at seeing past that.
It's analogous to how regular people don't realize just how much Photoshop and photographic skill goes into making someone look as good as they do in magazines and on their IG feed. We look at them and immediately conclude that we're some kind of a sub-human degenerate species compared to them, whereas in reality it's all bullshit.
It feels SO much better to swim in one's lane, not looking around to see how everybody else is doing, especially when it's not real.
I'm not a religious person, but there's something really powerful in the admonition not to not covet your neighbor's spouse, house, animals (car?) etc. Except it's much worse with IG, where you're exposed daily to hundreds if not thousands of "neighbors" who are all showing off their pretend-success.
The genius of IG is that it makes people willingly subscribe to hours of marketing every day.
I don't really care for hilighting peoples past skepticism but this guy literally asked for it:
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[...]
This is not going to be one of the best tech acquisitions of the next decade. YouTube helped to propel Google into content. It also helped to commoditise web video in a massive way: reminiscent of the way which Google commoditised search (YouTube is probably just short of being a byword for online video at this point).
Instagram is a photo service in a sea of other photo services. Photography has been around on the web in meaningful ways for a long time. Flickr lost out to Facebook in the community stakes, and Instagram is doing great in whatever-the-fuck market it's in (the share-to-my-twitter-followers market?), but this is not Google acquiring YouTube.
He's not completely wrong though. Instagram was a photo service when it started. The focus was on photography. Interesting pictures of things happening in the moment. It was about taking the best picture you could in the moment and being forced to post it.
I'm not even sure I'd call Instagram as a photo service anymore. The original core functionality (using it as a digital polaroid and applying a filter) doesn't even seem to be something people use at all anymore. I'm not even sure the majority of the posts are even photos—what between the random images with text above them, screenshots, and the videos.
Instagram was a photo service in a sea of other photo services. Now it's a generic social network where you just post whatever.
Instagram is supposed to be at around 1.75B users and triple or quadruple their current revenue by then. Of course anything can happen, but chances are the user growth and revenue growth are going to happen. At least Instagram is only potentially worth $100B right now with only $500M a month in revenue.
To be contrarian - Facebook is transferring its own user base to Instagram at a quarterly rate which is convenient to shadow Snapchat. The people I see there aren't much different than the ones on FB every month. FB is notifying me that, every single friend on FB is now on Instagram.
My likes on Instagram aren't shown to my followers - (I hope ) and that's the main difference which affects my behavior. Likes on instagram are cheap, like a casual double tap. On FB or LinkedIn they're expensive.
It really depends on where you live. Instagram and Facebook are still achieving substantial unabated growth in developing countries. In the US, usage for FB's main app has pulled back a little, though remains pretty high.
The major difference in developed countries is that the new post-millenial generation aren't seeing the same usage patterns.
I'm a 30something curmudgeon, but I have become addicted to their "explore" page or whatever it is. Their algorithms have masterfully created an infinite scroll of addictive content that generally applies to my tastes.
I caught myself a few months ago scrolling through that page for almost 30 minutes before realizing what I had been doing. I now have to be very intentional about not going down that constantly-refreshing feature for more than a few minutes.
Anytime I ask my wife what she's doing on her phone, it's almost always Instagram. No more Snapchat, no more Pinterest, and no more "official" Facebook.
Could you further explain a bit the appeal? I have never used Instagram and I imagine it as scrolling through dozens of pictures of cool stuff people do... Is that it?
Do you have "feeds" with pictures that correspond to a specific interest of yours? (Is Instagram actually the best place to find interesting pictures on a range of topics?)
Do you post a lot yourself or is it virtually all "consumption"?
Would you say the identity of the posters plays a significant role (friends, celebrities... ?) or is it really more about the content?
Sorry for the barrage of questions, feel free to ignore any or all of them!
> Do you have "feeds" with pictures that correspond to a specific interest of yours? (Is Instagram actually the best place to find interesting pictures on a range of topics?)
Yes, the explore page has tabs for topics.
> Do you post a lot yourself or is it virtually all "consumption"?
Both. Consumption of all my different interests from small and major content producers. Then I post my photos to my ~150 friends.
> Would you say the identity of the posters plays a significant role (friends, celebrities... ?) or is it really more about the content?
Content for me, but I do seek out some specific accounts because I know what to expect.
I'm between 25 and 30 and I find myself in the same situation. I suspect the addiction comes from a cognitive or psychological trait related to sorting and filtering things together. If they show you 5 pictures you don't like much, with 1 picture you like, you want to make that picture "win" against the others. The only tool you are given are : likes, comments and report as spam.
I simply do not understand the attraction of Instagram. My brother posts photos on it, and the quality of the pictures is rubbish. They're small, with compression artifacts. The app itself doesn't even let you pinch to zoom without snapping back when you let go (fair enough given how low resolution the pictures are).
Obviously I'm looking at this wrong - it's clearly not an app for posting photos, because it sucks at that.
To expand, the fact that the pictures are imperfect quality pretty much is the whole point. The inability to really zoom in, all of the filters that adjust the hue/sharpness, etc are all things that help you hide away imperfections in your photo and draw attention to the broader gist of "look at what I'm eating/where I'm traveling/what I'm doing/how pretty I am!"
The point of Instagram isn't to be able to see the wrinkles in that model's face. The point of Instagram is that you can't see the wrinkles in that model's face.
Ah, that explains why they won't allow you to post photos from their website.
I do some serious-amateur and (when I'm lucky) semi-pro quality photography using a "real camera". I was going to post some of them on Instagram, but discovered that I can't do it except maybe via the phone app. But there's no way I'm shuttling photos from my desktop to my phone so that I can upload them to Instagram.
There is an Instagram app available on the Windows store for some reason. You'd think it would make sense to build a better web client instead, but there you go.
Apparently you can post from the browser if you change your user agent and pretend to be using a mobile browser, so it's specifically desktop browsers that they don't want you to use.
Instagram is by far the best big social network for "good photography"; I don't see how you can miss that. It might be due to just following / seeing pictures from your brother or IRL friends. Go follow some random accounts that post great photos related to your interests and you'll quickly discover the joy.
I use instagram almost entirely to showcase my photography:https://www.instagram.com/imjustjk/. It's certainly not a perfect platform but it's good enough (and better than most). It's a mobile first platform that's simple, intuitive, and has huge adoption. It also has great loading speed for the amount of content and even the quality of images. I'm not sure what you expect on a mobile app? Do you want to be able to load full 42 megapixels images of mine on your phone?
Well the photos my brother takes are studio based - he's getting into product photography, so the shrunken, low quality pictures served by Instagram are just frustrating - I want to see something where I can zoom in to enjoy looking at the details, rather than something that's a quarter of my phone screen at native resolution.
its like why cosmopolitan gives bad and ridiculous relationship advice
but yes, you are looking at it wrong
Instagram gets away from all scrutiny by looking like a toy. Like when you are hacking someone's wifi with a Nintendo 3DS while they are wondering the appeal of this cute device for children. Instagram is likely the most technologically sophisticated social network out there and has been for a while.
The UI merely escaped feature creep for most of the decade.
It's not an app for posting photos exactly (even though it is), it's an app for showing people things. Here's my food, here's my outfit, here's what I was doing today, here's what the sunset looked like on my vacation. It's an interesting take on communications between people. It has its dark side (people going out of their way to "get the gram" so they can be envied by their friends instead of just trying to enjoy things organically; people, especially young women, who become overly pressured by their peer group to look and act a certain way) but when used well it can be a nice way to keep up with what your friends are doing. Think about it like a modern take on post cards.
I used to agree. But when I tried it myself, I got it. It provides pretty much the right level of intuitive control over how you present your own content. It's a really elegant platform for sharing and consuming visual content.
Instagram is more open than FB for example. As others said, you can also find people who post high quality pictures from camera on it, but that defeats the initial mission of Instagram (capturing the moment). Looking at images is somehow more easy when you are on the go than watching at a page full of text (ala Reddit). Mobility, messaging are some of the success factor of Instagram in my opinion.
I don't use Instagram so I don't have the app installed, but sometimes I land on some page on instagram.com. That site is awful, and considering how much resources they have I have to assume that every annoyance is there on purpose. Middle clicking an image to open it in a new tab doesn't work in Firefox, and comments are really frustrating. If the image isn't very tall the area for comments isn't tall either, so you have to scroll through a tiny box to read comments. I can't find a way to search tags on their website without searching for it on Google first.
Like you said, it's not an app to post photos. It's all about the feed of pictures, not the pictures themselves. It's visual communication, not art.
> I have some adult friends spending 1 or 2 hours a day on Instagram. I can’t even imagine how much time millenials spend on it.
Millenials are now all adults. :) A good chunk of the millennial generation is now in the child-having and house-buying (well, maybe not the later, too many avocados) stage of life!
An improved, AI-powered browser extension that correctly does the Snake People transform would be a sweet Show HN. "A good chunk of the snake people generation are in the egg-laying and burrow-buying (well, maybe not the latter, too many baby mice) stage of life!"
Millennial here, deleted my account a few days ago.
Unlike most platforms, Instagram cuts strait to the most depressing part: pictures. I've had enough with social media, and I envy those who never created a Facebook.
Why do pictures depress you so much? Honestly, I think if that's the case, it says that you have some unresolved issues you probably should deal with. Part of what makes social media seem depressing is your attitude with it.
I like Instagram for the opposite reason. I only want pictures, and I definitely don't want anymore whiny rants, third-rate political screeds or fake news sharing.
A starting point (at least it was for me) might be to unfollow (not unfriend) everyone. That way, your feed is empty and you'll get bored opening facebook after a while. You'll still get event invites and direct messages, so you're missing very little of substance.
This is a pretty narrow Instagram experience. I follow my actual friends who post random things from their life, and then people from a few different hobbies.
Except for watch people, none of it is carefully curated 'look at me' experiences. Watch people are another stripe though.... $20k on the wrist, $200k steering wheel.
It has always been like that. The amount of energy, of pretending, we put into recreating past experiences through retelling, photo, movie, conversation... it almost always trumps the experience itself.
Facts don't matter. Only opinions, how we choose to see them and agree on its meaning as a group matters.
Photography has been a huge hobby for decades. Is the fact that it is so much more accessible now really mean that the entire basis is proving your experiences were amazing rather than experiencing them?
10 years ago, no one every would have accused someone who brings his DSLR onto a hike of "not experiencing" the hike. (Though you might have a point that it would have been pretty weird to have brought a camera to brunch just to get a great photo of your eggs benny)
A follower with a terminal illness wrote a heartfelt letter to a popular Instagram influencer that they followed and whose photos they enjoyed. When they passed away, the letter was sent on their behalf to the influencer.
When the influencer received the letter, they quickly skimmed through it, said “Cool” and tossed it in the trash with some other junk mail.
What should they have done? Reached out to the family of the anonymous follower? What does the "popular Instagram influencer" owe to someone who enjoys his/her photos?
Maybe no one sees anything wrong with it, and perhaps there is nothing wrong with it, hence the downvotes.
What's depressing though is not that people post pictures of a life you wish you had, they do it while not giving a shit about you, no matter how much you might admire them. If you have millions of followers, or maybe even a couple hundred thousand, then statistically a few die everyday, without even so much as a passing thought.
And yet we waste so much time looking at these people's content and letting it depress us, and not enough at those around us who matter more.
I wouldn't make the assumption that millenials spend significantly more than that on the app. It's certainly possible, I guess.
But as I commute to work and back (hour by bus or train) - it's often 35+ aged people who have their eyes glued to instagram/facebook the entire length of the trip.
The other day in a plane, all the people next to me and in front of me were on FB/Insta before the flight. After landing, everybody turned off the flight mode and got back on FB/Insta!? The flight was 1-hour long.
Do you know what a breakdown of that time would be like? I can't imagine spending an hour on instagram, unless they follow a lot of people with stories and always keep up with them.
It's either that or YouTube. I guess you could argue for Apple acquiring NeXT, but that's an acquisition that isn't really able to be measured in the same way.
Why not since Bloomberg is now pulling numbers out of its ass? A billion MAU with projected $10 billion annual revenue gives a 10x annual revenue valuation. Apple has long surpassed a billion iOS units sold, and annual revenue is $230 billion, give or take, so it should be worth $2.3 trillion. Not bad for an inflation adjusted acquisition worth $654 million.
And Apple is not a "fast growing business"? Have you looked into their "Services" category? IG's REVENUE is claimed to be $10 billion. Apple's Services NET SALES was $9.19 billion. In the last QUARTER. So, yes, Apple is a "fast growing business", and is growing faster than Instagram. If Bloomberg was fair, Apple's services alone is a $400 billion company.
Taking a long-term view, IG's revenue comes from advertising i.e. it's a one-trick pony, just like Facebook. Apple is a diversified company; even though iPhone makes up >60% revenue, is anyone with an iota of financial sense going to complain that it's a bad thing?
Monopoly? In 2012, Instagram had 40 million users and no revenue[1]. Hardly a monopoly.. Everybody mocked Facebook for buying up Instagram for the amount of money they were offering. Nobody (or, perhaps, very very few amount of people) at the time thought it would become a $100bn company. You really think the government should have had the foresight to block this? Wishful thinking on your part..
I don't think I misunderstand. In 2012, there were quite a few up and coming social media apps. Twitter, Vine (2013), Tumblr, Pinterest, Snapchat (2011), and even Google+. Plenty of competition from both small and big companies. I'm not saying Facebook isn't a monopoly but given the options, you can't possibly think that at the time Instagram was going to be the "Facebook killer".
In hindsight, sure, we'd all love that. But seeing the recent FB hearings with congress, it seems they are still figuring out what the internet is.
Shame on the government for allowing an enterprise to become so successful. We should all protest for a worse economy! Fewer goods and services! Unemployment! That's what we want!
I laughed too, I was thinking "Wow, $1B for a photo app that has some lame filters, take a semester of digital image processing and you could do that".
To their credit, the app was extremely simple back then, today it has managed to add complexity without being so overwhelming(although Instagram TV adds more eyesore to the screen), slowly they copied good, proven features and blended well into the Facebook ecosystem.
> Well, I think FB has probably lost 100B in value, and as someone who stopped using FB this year because I dont enjoy it anymore-I moved to instagram and twitter.
I remember not thinking that it was overpriced, but amazed that it became a threat to Facebook worth that in just like 2 years. If I recall correctly, it was a team of 13 at the time of that offer.
Social pressure to be on instagram seems to be growing. For years I could get by with facebook, and my phone number / whatsapp for close enough friends. I'm now on instagram after a bunch of people I met independently in Berlin, Amsterdam and San Francisco in the last few weeks expected me to have an account there. I told the youtube UX person who I met in SF that I noticed this trend and don't fully understand it, and her response was that instagram is just how you write messages these days, as if this was totally obvious and not a side feature of instagram.
What if I just want to hang out with my friends? It’s easiest when everyone actually uses the same thing—people literally complain if I text them. The result is I lose touch with people because it’s exhausting keeping track of all the places my friends are.
I wonder about Instagram's success if they had decided to reject the Facebook acquisition. While there's no way to know who got the better end of the deal, it would be better for the tech ecosystem to have more large players and their success feels inevitable in hindsight.
Facebook probably would have copied them somehow, though I don't know if it would have been successful. FB's duplicate of Snapchat has been a huge success and is a major part of IG today. I don't know if FB would have been able to successfully replace Snapchat without using the Instagram app as a springboard.
Instagram Stories seem like a logical extension of Instagram itself. Adding a pure photosharing section to Facebook or something like that in order to copy Instagram seems much more redundant and difficult.
To be fair though, the minds of Facebook have much more incentive to find a good way to do so than I do
they did copy them, it failed. it was called "facebook camera"
edit: they also had a snapchat clone called, "poke" that too failed. the only reason they got to snapchat was because instagram was so popular and they just went ahead and copied the most popular aspect of snapchat: stories.
I feel like Facebook would have found an alternative to squash the competition, but also, in this case I agree that they were already bound to be successful given the ease of use.
I guess they could’ve made more effort to cater to professional photographers (and steal marketshare from Flickr and 500px and similar) and offered paid plans.
I think Instagram has much better business fundamentals than Snapchat though. There was nowhere near as much of a struggle to monetize Instagram as Snapchat from what I recall.
I enjoy IG because I have narrower friends and family there. ...and Orvis. Love flyfishing and honestly I couldn't consume the content there or see amazing fishing or be "up" on their stuff by watching tv or browsing. It's condensed. I tried following some skiing stuff but just get spammed by people trying to hawk stupid ski sayings on tshirts. Mostly recycled junk. I now almost have more followers by people hawking ski t-shirts than friends. It's just stupid.
Instagram is a perfect business case on how to integrate an acquisition and make it better than it could have been on its own. It should be studied in business schools as to how to not fuck up an acquisition. So many companies buy things that die, and I thought this would happen to Instagram but it has only become more popular, it's quite an impressive feat.
Facebook (the company) is in for the long haul and this is a perfect example of it. It's insane how Zuckerberg has managed to establish the company so well in a segment (social media) that is so susceptible to fads. Facebook.com's usage could very well plateau, but the company has Instagram, WhatsApp, and some bets that are yet to play out (Oculus VR). Zuckerberg isn't lucky here, he just has incredible insight about what matters in the social media business and what he has to do get there.
I recently started using Instagram (at first, to boost the number of followers for someone's organization's account). But it's actually kind of fun, every once in a while I see something interesting and instagram is a place I can post that without really bothering other people (since that's the point!)
At the time of the acquisition, people criticized the cost per user of the acquisition. $1B for 40M users was a cost of $25 per user. That analysis failed to take into account Instagram's growth, and the cost per user today is roughly $1.
$100BB strikes me as true on the face of it, but there's something in my gut that tells me that is much too large a valuation.
Is a television network worth $100BB? That's what Instagram/Youtube/Netflix etc. are becoming a network of original shows. Of course, Instagram/Facebook are still early so they still look like Youtube in their early days, but they'll all converge to the same point of just outright creating their own original content.
Gotta be careful with estimates, a random analyst says it's worth 100b and a research firm says it's going to reach so many users in a few years, but zero attention is paid to what assumptions underlie those estimates; publicly available investment research information is useless
The thing I wonder is whether some of this value is coming at the expense of people reading books. My guess is there's a significant overlap in the demographics. Which is too bad, because I view books as a positive for society while Instagram really seems to be a big net negative.
Instagram is one of the simplest social networks. It's twitter with a focus on picture posts. It's blogging but every post is centered around a picture.
It's one thing to not want one yourself, but to be willfully ignorant about something so simple and publicly visible seems like an odd thing to feel the need to advertise.
Bizarrely I find that Twitter is better for posting pictures (they're not so low resolution and compressed, and the UI is less hostile to viewing them).
I disagree, but only because reply tweets are the same "class" of content as the initial image tweet itself. It makes it less a comment on the image and more a post directed towards the image's poster. I also think Twitter's UI is still somewhat hostile to viewing them because of how thumbnails aren't just shrunk but also trimmed. I can see where you're coming from though.
The founders sold to FB for 3 billion. Makes you wonder what WhatsApp is worth to Facebook. If 3B then is worth 100B now to FB is WhatsApp worth 633B now? ((100/3) * 19)
I know that’s just back of the envelope math, but I’d suspect monetizing whatsapp has been far trickier (do they make money at all?) so it wouldn’t be multiplied at anything like Insta.
The e2e crypto must really kill opportunities to sell data or push ads.
Wonder if they will ever spin it off as a public company? Seems like Facebook is on the way out and shareholders are going to want to double down on the future.
You do realize that Instagram has ads that companies pay money for right? That's where they make their money, when companies purchase ads on Instagram.
I think TheRealPomex' point was that the companies pay money for those ads because facebook has the user data to ensure the ads are appropriately targeted.
Even with professional marketers, total joke and waste of money. People do not click on ads, and those that 'do', might be fake facebook bots or actually facebook messing with numbers.
My new 'ad' is that I make content that people will search for on google. Then they can check out the rest of my website.
As much as I’d love to agree with you there are a lot of idiots out there that click on ads because they legitimately believe it’s a good product/service (hint: if they have to pay someone to shove their product in your face, it’s not a good one), or can’t tell the ads from real content (I guess that’s why “chumboxes” like Outbrain/Taboola are still a thing).
I had first-hand evidence of this when my friend fell for some weight loss scam ad of Facebook. We ended up charging it back, and despite all that she’s still not convinced and will happily participate in loyalty schemes, give out personal information to anyone that asks (she literally gets one spam email every few minutes in her Yahoo mailbox) and prefers buying from unknown/shady/scammy sites like Groupon rather than more reputable outlets.
You're doing it wrong. Hire an agency who knows what they're doing.
Your "ad" is just content marketing. This difference is you pay with your time (or others time) to create it, rather than paying for it to be put in front of other's eyes.
Some of the ads I get on Instagram are completely ridiculous. I've been taking screenshots of them because they are so likely ineffective for the people who place them that it's almost humorous.
For instance, an advertisement for a Chinese restaurant. I can't click on their name to go to their profile (that seems to be optional). Clicking on the action button asks if you want to dial their number immediately - remember at this point you don't even know what city they are in, haven't seen a menu. When I have checked out some of these restaurants they are often in other states.
> I can't wait for that to become an illegal trade.
Why would that ever happen? How could that ever happen? That would destroy everything (note: hyperbole) of value currently offered for free on the internet.
The worth of an ad impression or click is measured in fractions of cents and the adds up to peanuts per month.
Publishers can just charge those peanuts directly and I’ll be happy to pay up (plus they’ll get more without the dozens of middlemen in the advertising/cancer industry).
But seems like publishers are greedy and want more than what the ads pay them, so that’s why subscription-based content sites don’t work at scale. For example, “Le Figaro” (a French newspaper) asks 9€/month for their subscription, despite making less that 1€/month from serving ads to me, so obviously I don’t subscribe and get by with blocking their (really shit, think Outbrain/Taboola “related content”) ads.
On the other hand, I’ve recently started supporting creators on Patreon at the tune of 1$/video. It’s something I can afford to do for every creator I watch, and while being an insignificant amount by itself it would be a significant bag of money should every viewer pay (and definitely more than they can even dream of making from ads).
Instagram is the only effective choice for social networking and business promotion in a large social group I'm aware of - American alternative culture, both sexes, from 16 to 45. IG has also been adding features like stores.
I guess I'm one of the outliers. The worst part of FB to me is the vain pictures and constant "look at me attitude", which is pretty much 90% of the instagram content I've seen. The comments are about on par with FB comments on the "look at me" picture posts as well, so little to no improvement or added value there.
I don't have an instagram account and have 0 interest in getting one or ever posting anything to it.
I wouldn't be surprised to see Instagram go the way of Twitter once more attention starts being called to the number of bots on IG. One of the big "value propositions" for IG is the advertising potential through influencers, but go to any influencer profile and you'll see that a significant portion of their followers are just paid bots. The "1 billion active accounts" number smells fishy to me.
I have a few friends that participate in the "influencer scene" (as influencers themselves and as marketing reps at companies who purchase posts from influencers) and it's basically an open secret at this point that aside from a select few celebs, any given influencer has an entire army of bots behind them to promote their posts. Getting on the top of the discover queue is basically just down to who has the bigger bot network.
If it's an open secret then the advertisers will adjust for it. Radio and tv stations have been working with fuzzy audience numbers for years and advertisers go along with it.
I'm pretty sure most advertisers already do adjust for it, because they know how big of a problem it is. But that's not what I meant to focus on.
What I'm trying to say is that, like Twitter, IG will probably start to lose a lot of public respect and valuation if they keep boasting "we have 1 billion active users!" once the general public starts to get wind of the fact that the 1 billion number is bullshit.
I saw a hot girl with 1M followers. So I decided to check out her website.
Website looked like a bland woocommerce store, no soul, just the girl selling pictures of her and underwear.
I went to alexa's Site Info and saw her website was ranked top 5 million or something poor. However, her rank in india was top 100k. The girl was not Indian, she had botted/paid so much that her fake traffic was visiting her website more than her real traffic.
I guess I'm thinking I should start botting? I already make an instagram 'like' bot on friday in 60 minutes.
Doesn't work like that. Return rates on assets average about 6% or so. i.e., if you invest $100, you expect a $6 annual income. In other words, a $100b investment would expect a $6b annual income.
Take average PE ratios for example, about 15 (so 6.6% earnings as a percentage of market cap).
That would require about $6 per user per year in profit. Facebook is at $6 average revenue per user (ARPU) right now, but >$25 for US users for example, and growing.
Instagrams revenues are currently around $7b with a fraction of that profit, and at current growth rates, the valuation isn't crazy.
If the average user spends 1 hour per day, that's 365 hours per year at $5 or about 1 penny per hour of use. It's not hard to squeeze in a penny worth of profit from ads per hour of use. This would get you at $6b net income. Given that's in the cards for the future, the valuation isn't crazy.
The only flaw investors can make is that growth either isn't sustainable (I think it is for quite some time), or that Instagram users will eventually move on to other things (e.g. Myspace) such that the years of profit will be shortlived (more likely). Nobody invests $100 to gain $5 per year for a short period, that's based on perpetual income expectations which would require Instagram to stay around for quite a long time.
Nice back-of-the-envelope analysis. But just wanted to let you know, the ARPU numbers are per quarter, not per year! For Q1’2018, from the official earnings report, has worldwide ARPU at $5.53 for that quarter. In US, for Q1, it was $23.59 ARPU.
It's exploding because apart from being a really good product, they made the UX super, super simple. With just enough little nuggets of complexity to make it feel whole.
On another note, what do you call this phenomenon, when something is super simple, but you can just tell how much work went into it? iA Writer, Instagram, Dropbox, iPhone, a great chair...they feel expensive, regardless of price.
Honestly though, building its functionality in a weekend is perfectly doable, the hard part is the ad tracking/stalking infrastructure that goes in the background.
What a time to be alive. Many tech companies now that don't offer any actual product or service and don't even make money are valued multiple times more than the biggest car manufacturers.
Instagram makes money. Companies pay them to purchase ads. Isn’t that obvious ?
“In 2018, [Instagram]'s estimated net mobile advertising revenues are projected to reach 6.84 billion U.S. dollars, up from 1.86 billion U.S. dollars in 2016.“
Edit: Also worth pointing out that you could argue Facebook's infrastructure was hugely important to their growth. Instagram was literally almost anonymous profiles. However, once FB got everyone to connect their FB accounts (which they may have been able to do with only a phone number as I did notice this became a requirement), they gave advertisers and brands a lot off resources and tools (and reasons) to devote money and energy to the platform.