Why Luxury Brands (Should) Love Instagram

Why_Luxury_Brands_Love_InstagramIt's been an eventful year for Instagram.April 2012 saw the purchase of the photo sharing service by Facebook for $1 billion, a scant 18 months since Kevin Systrom and Mike Krieger launched the service from a drafty office in San Francisco.December saw the debacle surrounding its updated terms of service, which granted it the right to sell users' photos without notification or compensation. The resulting uproar led to a hurried retraction but not before a proportion of users had jumped ship to rival services.By March, the service had recovered to the extent of announcing they'd hit the milestone of 100 million monthly users for the first time, a number which put them within striking distance of higher profile social networks like Twitter (200 million active users) and Google+ (340 million)And this month saw the launch of their new photo tagging feature - a move they hope will grow the services' popularity amongst people and brands.That's not to say that Instagram isn't a well used service amongst brands - it is, certainly amongst blue chip brands. 59% of Interbrand's top 100 brands are signed up to the service and that includes a number of leading luxury brands.Burberry's account, which mixes aspirational product photography with images of London - to reinforce its British heritage - has over 800,000 followers. Tiffany & Co, a brand who's breathtaking images have no need of Instagram's famous filters, have over 500,000 followers as have Gucci, whose popularity derives less from their own images and more from the pictures their followers share using the #gucci hashtag.Why is Instagram such an attractive environment for these premium and luxury brands? 3 reasons.Firstly, there's the audience - although the app is now available on Android, it started its life on iPhones and iPads, and most of its users are still iOS based.  Apple devices are a great filter for premium and luxury brands as their owners are likely to have more money in their pockets.  But the audience isn't just affluent, it's young and affluent. Instagram's usage is impressive amongst the 18 and 29a and 30 to 39s - a reason why fashion brands have been the ones most likely to grasp the opportunity it presents. And, of course, those that create and share great image content are likely to have the heightened sense of the aesthetic to which the craftsmanship of luxury brands appeals.Secondly, there's the nature of the content - photos - the natural currency for luxury brands who have beautiful things to showcase.Thirdly, there's the potential that Instagram presents for high quality user-generated content that can be shared across other social networks - with the creator's consent, of course.  An image literate community are more likely to generate the sort of content that premium and luxury brands will want to showcase across other networks.And the recently announced photo tagging feature has the potential to both broaden and deepen the relationships between premium brands and their consumers on Instagram.  Users will be able to tag their photos with the @ handles of their friends as well as the @ handles of brands.  Tagged photos will form the basis of a new 'Photos of You' section on a user's or brand's profile page, although users and brands will be able to decide if the tagged photo is displayed or not.Not only will this new feature help to virally grow brands followings, as users' followers see them tagging the brands in their images, it also creates a natural and easily accessible stream of user-generated content that will automatically showcase on each brand's profile. Previously, brands had to hope users employed easily indenfiable hashtags when posting pictures of their products and manually search for that hastagged content.  Now that content will come to the brand automatically, and probably with greater frequency.That's the present - and its enticing enough for luxury brands - but the future is interesting too.  As each user tags their photos, Instagram will build up a broader picture of their brand preferences and interests.  With the launch of geotagging and photo maps last year, Instagram is already building up a picture of their geographical movements and the places of meaning to them.  Each new initiative helps to to build a better picture of who users are, and what advertising might appeal to them.  It's an inevitable step - Facebook will want payback on their $1 billion investment, after all - and one that became all the more likely after the abortive move to make Instagram a user-generated Corbis back in December. And with the average Instagram user following less accounts than the average Twitter user, the extra content that advertising provides, if well targeted, could be more welcome.The last 12 months may have been interesting for Instagram but the next 12 months could prove to be more interesting still for the luxury brands who seize the opportunity.