Instagram: On the Road to Monetization

By Amy Vale

In December, Instagram announced its new Terms of Service to the public, which have since gone into effect as of January 16, 2013.  According to these new terms, “you agree that a business or other entity may pay us to display your username, likeness, photos (along with any associated metadata), and/or actions you take, in connection with paid or sponsored content or promotions, without any compensation to you.” Needless to say, these new “terms” set users off into a frenzy of anger, frustration, and confusion. In response, the Facebook-owned photo sharing app has since confirmed its reasons behind these very confusing Terms of Service.

Instagram isn’t just a fan favorite with everyday Joes and Janes; it’s become heavily adopted by major celebrities such as Ashton Kutcher and Kim Kardashian. But thus far, there hasn’t been any real way for the app to generate revenue. So let’s talk about a few ways Instagram can monetize while not disturbing the experience that millions of users have come to love.

Follow in Facebook’s Footsteps with Sponsored Photos
A lot of the panic and outcry began in December when Instagram first announced its new Terms of Service.  Many people were appalled at the idea that Instagram, the favorite photo sharing app with 90 million daily active users, would sell their very personal photos to brands. But, it turns out that’s not the case; Instagram is taking its cue from Facebook’s “sponsored post” revenue model. Basically, advertisers can pay to “sponsor” your posts in many categories so they appear prominently in friends’ News Feeds. It’ll be interesting to see how Instagram leverages targeting capabilities so that Sponsored Photos feel more relevant and enhance the overall user experience. By using sponsored photos and forming strategic partnerships with multinational brands, Instagram will be able to do what Facebook and Twitter have already been doing for months now – generate a consistent stream of revenue.

Pay For Premium Filters
One of the most popular features of Instagram is the ability to take a photo and then apply filters to the image, giving it a different vibe than your average phone photo. While the filters are fun, the twenty options currently available aren’t all that different from each other. Adding in premium filters that could be purchased in-app would allow users to set themselves apart from their friends. A Pew Research Survey in September 2012 found that while 12% of online adults use Instagram, 27% of those online adults between 18-29 use the photo sharing app. These are also the type of users who would be more comfortable and inclined to spend $1 or $2 within the app to purchase unique new features.

Get Physical with Photo Prints
GeekSugar recently ran a post advising users which companies can print Instagram photos. Instead of driving users and their money into the arms of others, Facebook may want to consider setting up their own in-app print option. It would have to be competitive in price with the already-established printing options, but offering it through Instagram makes it much faster and easier for the app’s millions of loyal users. Instagrammers, as they’re often called (by themselves), can choose their favorite photos, enter their payment information, and review their order all directly from within the app itself. Because users care about a simple user experience when it comes to in-app purchases, combining the digital with the physical elements of the overall photo sharing experience will help Instagram extend its brand across multiple channels.

Cool and Useful Apps for New York Restaurant Week

By Amy Vale

An eMarketer report, “MobileFast Food Marketing: How QSRs and Fast Casuals Are

Getting Quicker and Faster,” stated that forty-four percent of consumers who eat fast food at least monthly, owned smartphones in the last quarter of 2011, according to food service research firm Sandelman & Associates. That’s 14 percentage points higher than eMarketer’s estimate of overall smartphone ownership for the same period. Clearly, mobile devices and food go hand-in-hand – whether it’s using your mobile device to download and use restaurant locator apps, using mobile coupons or place an order.

With the kick-off of RestaurantWeek last week, it’s likely that a lot of New Yorkers will be downloading and utilizing a variety of apps to help them locate participating restaurants, find mobile deals and coupons, book reservations and much more. Whether you plan to venture out to one of the thousands of restaurants participating in New York Restaurant Week 2013, or you’re looking for an easy, but delicious recipe to cook at home, here’s a few cool food-themed apps that won’t just improve your dining experience overall, but are doing some cool things to monetize for app developers.

Food Network’s “On The Road” App

The Food Network is a household name around the world as the ultimate place to go for top recipes and cooking tips. Last year, the food destination decided it was time to go head-to-head with other restaurant-discovery services by launching its own app. With its “On The Road” app, foodies can find eateries featured in the channel’s TV programming or recommended by its renowned chefs such as Bobby Flay and Guy Fieri. As beautiful and user-friendly as the iPhone and iPad app is, it’s also a best case example of how an app can be both useful for consumers and generate revenue for app developers. One of the best things about this app, from a mobile perspective, is that it does an excellent job of extending the brand’s programming and content across multiple platforms (TV, online, and mobile).

BuzzTable App

BuzzTable, a startup which graduated from the ERAccelerator last year, has two apps that benefit both diners and restaurant merchants with a built-in mobile loyalty program. Users can send feedback, sign up for rewards, and check out trending dishes as sourced from OpenTable, Yelp, Foursquare, etc. Plus, they can add themselves to a wait list virtually before arriving. Meanwhile, participating restaurants can use a companion app called WaitList+ to check in guests, communicate with customers during busy periods, and get customer feedback after their dining experience. Instead of calling out names or using handheld buzzers that force guests to wait around the restaurant, guests can be contacted on their phones and feel free to spend their wait time more productively.

BuzzTable is an excellent example of an app that monetizes by charging restaurants a set SaaS platform fee (starting at $49/month) to manage their guests via the mobile app or wait list app. The app works with iPhone, iPod Touch, iPad, and Android devices.

Nara Mobile App

Nara Mobile takes your culinary interests and tastes and creates a personalized restaurant search just for you. You simply input your favorite types of food, restaurants, and activities, and then choose from one of the 25 supported cities. The app even helps you choose new restaurants when you travel, based on your hometown favorites. You can choose from the suggestions and find menus and reviews from FourSquare. After you have eaten at one of the suggestions, give it a thumbs up or down so Nara can keep track of your interests and continue to personalize your results. Think Pandora or Netflix, but for restaurants.

According to Nara Mobile Founder and CTO, TomCopeman, the app isn’t motivated by sponsored search or targeted ads. Instead, they plan to monetize through affiliate booking partners and via other channels. It’ll be interesting to see just how they monetize the app in the next year.

Mocean Mobile CEO Speaks at Mobile World Congress

By Amy Vale

Mobile World Congress is the world’s largest exhibition of the mobile industry, featuring prominent executives and professionals from mobile operators, device manufacturers, technology providers, vendors and content owners. This year’s conference will take place in Barcelona, Spain, February 25-28, and will see thousands of mobile industry professionals converge to explore the new mobile horizon.

This year’s event has special significance for us. On Tuesday, February 26^th, in a session titled Marketing: How Not To Build A Mobile Campaign, our very own CEO David Gwozdz will offer a light-hearted look at how mobile advertising and marketing are moving on from their early incarnations and in the next phase of development. The session will paint a clear picture of what works when strategizing and executing mobile advertising campaigns, as well as a candid look at common mistakes that many marketers make. If you plan to be at the event, be sure to stop by and visit our team to discuss the importance of mobile advertising at Booth #8.1A10.

As always, we’ll be sure to share up-to-the-minute highlights of our time at Mobile World Congress, including photos, videos and more on our Facebook and Twitter pages.