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Instagram

CAPTURE AND SHARE WORLD'S MOMENT!

Intro (Just in case)

Instagram is an American photo and video sharing social networking service owned by Meta Platforms. It allows users to upload media that can be edited with filters, be organized by hashtags, and be associated with a location via geographical tagging. Posts can be shared publicly or with preapproved followers. Users can browse other users' content by tags and locations, view trending content, like photos, and follow other users to add their content to a personal feed.A Meta-operated image-centric social media platform, it is available on iOS, Android, Windows 10, and the web. Users can take photos and edit them using built-in filters and other tools, then share them on other social media platforms like Facebook. It supports 32 languages including English, Spanish, French, Korean, and Japanese.

Ref: https://en.wikipedia.org/wiki/Instagram

Lets see some facts:
With a monthly active user base of 2bn+ Instagram boasts of its popularity and one of the strongest userbase! Obviously with China regulated and restricted to use foreign apps and us Indians being most populated now, most number of users are Indians 🥲

Popular not only among individuals but also among businesses (44% of the users use the app to shop on weekly basis), with ad revenue over $43 bn in 2022.

Image1,2,3

The global average was 59.4 percent, which translates to almost six out every ten people around the world using social networks. Well this fact is surprising to me because I thought it should range anywhere between 65-75%.☹️

Ref: https://www.statista.com/topics/1882/instagram/#topicOverview

With 85% of user base under the age 45, it is an app loved by youth, with uers spending avg of 12 hours/month (dedicating this much time to a book would make us better in wouldn't it? 😏). 65K+ photos shared every minute! 🤯

Some more mind boggling stats, Image 4,5,6

Even in reels, it leads the app that is OG of reels I meant TikTok! Ref; Image 6

Ref: https://blog.hootsuite.com/instagram-statistics/

Why I chose this app for this project?

1. I am not working on any product currently to getting my hands on retention curve and other data would be tough, reaching out to 30 users in IG is achievable.
2. To me, no other app is more addictive than Insta not even Yt. Let me explain, I was away from social media for 3.5 years and was only actively used Yt, even then as soon as i installed IG, within 2 weeks Yt became archaic to me!
3. Also, I am spending a hell lot of time on building my own page (and also waste my time😭) , so why not read about IG in great detail.

LITMUS TEST🧪

RETENTION

Retention curve

So, I spent hours to get retention curve of Instagram overall but could not, however, I got it story-wise, reels-wise etc. Also, as of today there are no paid plans for individuals only for companies or professionals. Let's see how.

Image 7,8

This is how it looks if someone wants to boost their post to reach more people.

Image9,10

Found it! Thanks Tech Crunch.

• Instagram is currently adding 130,000 registered users per week
• Instagram’s 2.2 million users upload 3.6 million new photos per week (or 6 photos per second)
• 37.5 percent of registered users have never uploaded a photo
• 5 percent of users have uploaded over 50 photos
• 65 percent follow nobody, and only 12 percent of users follow more than 10 people
• For users who upload at least one photo, there is a 45 percent chance they will upload a photo the following week
• Those same users have a 25 percent chance they will upload a photo 12 weeks later, representing a significantly stronger retention rate than Twitter!! 💪🏻💐

Ref: https://techcrunch.com/2011/03/10/instagram-adding-130000-users-per-week/amp/

Let's hear some views of people regarding Instagram getting monetised :

As high as 8/ 10 people said that they won't sign up for the subscription plan. To them, as soon as social media gets monetised, they will opt out.

Ref: https://www.reddit.com/r/Instagram/comments/118e752/soooo_instagram_will_increase_your_reach_if_you/

Although, referring to Image 10, it seems IG is not ready to be monetised, not yet! The graph is neither smiling nor flattening but is declining.

DEEPER ENGAGEMENT 💍

INSIGHTS FROM SURVEY OF 20 IG USERS:

1. 12 out of 20 are either core/power user.
2. 14 out of 20 have been using it continuously for more than 5 years (7.5 years avg)
3. 12 out of 20 are not willing to pay, and 2 out of those willing to pay would want additional benefits if they will pay.
4. In general, most of surveyed people are in age group 25-35 years.
5. Even if they pay, 5 out of 8 who are willing to pay would prefer maximum of Rs. 100 a month with biannual plan at Rs. 7-800.
6. There were 2 churned users whose IG is inactive and rarely open the app and prefer fb over it (age grp 45+)

How have I assumed casual, core, power user?

Casual: Weekly engagement less than 2 hours (8 people)

Core: Weekly engagement 2-7 hours or more (10 people)

Power: 7+ hours, or with more than one account (2 people)

1. Average active IG user spends 29 minutes daily, with 12 hours/month
2. 70% of users watch IG stories daily
3. 40% post stories daily
4. 130 million users tap on shopping post each month
5. 4.2 bn likes each day
6. 98% fashion brands are on insta

Ref: https://dataprot.net/articles/average-time-spent-on-instagram/

https://www.socialpilot.co/instagram-marketing/instagram-stats

Ref: https://www.demandsage.com/instagram-statistics/

WILLINGNESS TO PAY 💰💵

Like I shared above, 12 out of 20 I surveyed were not willing to pay

Those who wanted to pay preferred biannual plans more than recurring monthly ones

5 out of those 8 want the price to be Rs. 6-800 for a bimonthly plan

2 out of 8 will only pay if they get exclusive/additional features.

So, to me people are still not ready for monetisation of IG as of yet because most of these are those who are quite active on the platform 🥴

So litmus test of my little survey result: ❌Failed

SUBSTITUTE PRICING

What is the core problem that IG solves?

1. Boredom: People tend to use insta majorly when they are free or want to kill time
2. Companionship : They also use it ti post major/minor life events that they undergo to socialise
3. Money/fame: Some make public accounts such as influencers as an additional income source, and to gain popularity among masses
4. More attractive content: After launch of FB, people across the globe started networking, making cheaper and faster connections, meeting long forgotten friends, orgs use it as a platform for marketing itself. But IG with its remarkable UX, better aesthetics deem it better than facebook
5. Ease of use : It is very easy to use
6. Filters: It has wonderful collection of filters which make users customise their photos, make reels etc
7. More about events and pictures and less about politics and gyaan: This fb lacks
8. More youth: IG has been favourite app for youth as it is more addictive and engaging
9. Better Algorithm : Better algorithm so more easy to consume content, relatability.

Substitute?

Well, one can say it can be substituted by FB, snapchat, YT etc but it is a decent blend of all three. lets see how.

What makes it special? What are users buying into?

1. Uploading photos: This gives IKEA EFFECT to the user as there are so many things which are easy and customisable as per aesthetic requirement. It gives a feeling
2. Scroll: Scrolling IG on mobile devices is a seamless experience, even the ads do not seem like annoying factor as they are very well targeted, making it's users to actually spend time to get to know about the product sold

If in future it monetises itself, what will people buy in it?

1. X's blue tick: Such thing can be brought up for IG (it already exists)
2. Exclusivity: First to see latest content etc eg of most famous IG celebrities like Virat Kohli etc
3. Better customisation
4. Better viewership of user's account and increased followings (like linkedIn)
5. Connections: More number of DMs, follow request etc
6. Professional accounts: to get better engagement and viewership if paid plans bought
7. Ads: Actively avoid not relatable ads

PRICING DESIGN

WHO and WHEN to charge?

A platform like IG,FB cannot be monetised like regular ones as almost 100% of their revenue comes from showing ads to the users.

❓Remember, if the product is free you are the product.

So, we can learn from YT, twitter etc.

Few things that the user may be willing to pay:

1. Blue tick: verification of his/her account
2. Better features could be given such as more depth in editing features such as additional filter options to upload pictures
3. Community building: Here, an element of exclusivity can be created and then it can be monetised. Let's understand by an example. If someone wants to make an IG page on cooking classes, which will be exclusive to those who take up the course will pay and IG can charge commission on it.

For the above ones, very nominal pricing to be done. However, there is a feature which has great potential for monetisation.

5. Instagram shop

Who to charge?

Like already mentioned, the monetisation framework cannot be applied directly here, because for Champions/ loyalists monetising directly, will take them to other social media platforms such as Snapchat etc. We cannot charge them by RFM model but rather giving them additional benefits, or taking some commission from the benefits that they are already taking from IG.

But for Instagram shop- we can charge instagram handles (influencer/SME) by facilitating them to get the sale from Customer

We can charge for accessibility from Influencer/SME

What is the core value prop & currency that helps users experience core value prop?

Providing tech, users and payment support to Customer -> taking affiliate fees + Payment support fees+ Logistic support fees

How much to charge?

meta ads India ROAS is 4 for fashion apparel

Shopify charges around 3-4% of the total Revenue

Payment partner fees- 2%

Logistic fees- 5%

User aquisition fees- 20%

We can bundle all the services and charge a commission of 25% on sales flat

When to charge?

As soon as the user takes up the services such as blue tick or any other monetising service from insta, s/he can be made to charge

In this case we should go for SYSTEM 1 design

Substitute Pricing for Instagram shop

Use case- Provide user aquisition, tech, payment infra and logistic services to the users

Substitute- Shopify for tech, meta ads/google ads for aquisition/ shiprocket for logistics,, payment infra- gokwik, razorpay, simpl

User are buying Insta shop subsription- value driven and accessability drive

all core tech problems will be taken care of by instagram team, hence complete focus on growing the company

Pricing Model Selection Framework