Instagram, the photo and video sharing app owned by Facebook, recently announced plans of expanding its advertising strategy internationally. Later this year, Instagram will bring ads to Canada, the United Kingdom and Australia.

The social media company, which has over 200 million active users worldwide, cited positive results from ad campaigns in the U.S. as its reasoning for expansion.

Instagrams advertising strategy works so well, but how?

Ads on Instagram

Source: Michael Kors

Since introducing ads in November 2013, Instagram has made efforts to make sponsored communications fit in with the platform, hoping to keep the appeal of its users.

Instagram's transparency has helped the app do things right. The company announced the change on its blog by providing in-depth information about why ads were coming and what users could expect. It also kept initial efforts limited to a small group of advertisers with existing loyal followers, such as Michael Kors.

Transparency continues today as Instagram labels all of its ads with a "Sponsored" tag, notifying users when they're viewing a paid photo or video. It also gives control in exchange for feedback; it lets users hide individual promotions and provide feedback about preferences and dislikes.

Drill-Down: Instagram's Advertising Strategy

This cycle of open communication and continuous improvement has helped advertising on Instagram feel less intrusive and more appealing. Photos and videos are directed towards the audience that views them, which decreases the risk of alienating users.

The result? Strong campaign effectiveness.

Source: Adweek

In April, Taco Bell advertised its new breakfast menu with a monthlong campaign. According to Adweek, it saw a 29% gain in ad recall and 45% increase in Instagram followers. Teen clothing brand Hollister also saw a 32% lift in ad recall. Even better, all of the original 15 companies who were chosen to test-drive Instagram advertising experienced positive results.

Instagram's advertising strategy success makes sense given content marketing principles of utility and social sharing. Ads don't feel like ads because they integrate seamlessly into the platform's visual feed. As a result, users want to interact with them and are more likely to recall their messages.

So what does this mean? Even though advertising on Instagram is relatively new, because it is different enough it can provides strong ROI and can help you connect with target audiences in new, memorable ways.

Tips for Smaller Operations

While Instagram ads certainly generate successful results, they are costly. The site doesn't use a rate card for promotions, but month-long campaigns have been estimated to cost anywhere from $350,000 to $1 million based on targeting, reach and frequency. For most small businesses, that places sponsored Instagram ads far outside of the marketing budget.

But Instagram is definitely not off the table. Alison Zeringue, a Partner Accounts Team Manager at online marketing firm Search Influence, offers four easy tips to leverage Instagram as a marketing platform for small and medium-sized businesses:

1. Embrace authenticity. Take real photos of real things and showcase organizational culture and brand lifestyle. Don't overuse filters or artificial backgrounds, which deteriorate the overall quality of an ad and won't resonate well with Instagram users.
2. Feature products in context. Show the way your products and services look and feel in action. For example, show up-close pictures of clothing and food items.
3. Don't overwhelm followers. Post enough photos and videos to sustain interest, but not too many that they're viewed as spam. Experiment with posting schedules to see what works best, and utilize scheduling tools like Latergramm to plan in advance.
4. Leverage analytics. Use apps like Iconosquare to identify influencers and accumulate stats on likes and follows. Evaluate progress consistently so that your best foot is forward at all times.

The Bottom Line

Source: Justice Mitchell

Instagram's advertising strategy reminds us of the power behind strong planning, platform integration and content marketing techniques. In just 9 months, the social sharing company has rolled out successful advertisements in the U.S. and has plans to move its strategy globally.

Even better, small to medium-sized businesses can take advantage of Instagram as a promotional platform by taking steps to engage audiences in visually-appealing, marketing-savvy ways.

Has Instagram helped to increase awareness, leads or sales for your business? Let us know about your experience in the comments below!