This week will go down in the history of the photo tech space ( if such a history is ever written) as a milestone. While predictably anticipated by even the laziest followers, both Instagram and Pinterest announced the addition of a “buy” button next to images. The latter has gone a step further, as it made it live for iOS devices with web and Android in the pipeline.
Why a milestone? Because ever since both platforms grabbed our attention by gathering massive active users ( 300 million for Instagram vs 50 million for Pinterest *est.), observers have been waiting for them to turn on the monetary switch. A “buy” button has been such an obvious option for Pinterest since its launch that it almost seems ridiculous that they have waited so long to add it. Primarily used by women posting pictures of items they wish to purchase or recommend to others, Pinterest is the quintessential referral platform. When first launched, the company was even generating revenue by automatically including affiliate links via
The company now valued at $11 billion needs to prep for its IPO and generate substantial revenues if it wants to attract Wall Street investors. And by all estimate, the additional button should be successful since the platform already generates 5.5% of all internet referrals. Along with promising advertising revenue forecasted to bring $500 million by 2016, the addition of the “buy” button should help confirm that Pinterest can be a highly profitable business.
For Instagram, the story is a bit different. First, the “buy” button ( renamed “Shop Now”) is part of a series of options for advertisers, the three others being ” Install now”, “Sign up” and “Learn More”. Unlike Pinterest, Instagram doesn’t need to prove profitability since its parent company does it for both of them ( Facebook revenue for the first quarter of 2015 totaled $3.54 billion). However, it cannot let the opportunity slip away. Already at work on Facebook, along with valuable analytics, it is hardly an effort to add it to Instagram. However, unlike Pinterest, the backslash here could be dramatic. Users of the photo platform consider it an artistic exchange and the arrival of such a mercantile disfiguration might upset many.
In the past, Instagram’s CEO Kevin Systrom has been extremely cautious at not causing waves that would upset his 300 million users and thus we might experience a very subdued version. According to a recent announcement, the “Shop Now” button will only appear on carefully vetted items that will appeal to viewers, based on behavior analytics. In other words, if you liked a lot of pictures of shoes, you will see shoes for sale, not lipstick. It’s also worth noting that the buttons don’t take you away from Instagram. Instead, they open a mini-browser within the app, so once you have done your shopping you’ll be returned to Instagram. All to preserve the experience ( and the heavily gated community). Again, since there is no urgency of profitability, expect a very slow, very cautious roll out.
One we haven’t heard from yet is disruptor Snapchat. Their recent partnership with Square which has, for now, been limited to friends paying friends, could ultimately be the backbone for an integrated payment solution. Adding a “buy” button to a 10-second image would allow brands to offer instant fire sales to a very digital, mobile shopping savvy user base. Think Gilt on steroid for teens. Ceo Evan Spiegel has made no mention of it, for now, but it wouldn’t surprise us if the company rolled out a version before year’s end, especially if Pinterest and Instagram show success.
Author: Paul Melcher
Paul Melcher is the founder of Kaptur and Managing Director of Melcher System, a consultancy for visual technology firms. He is an entrepreneur, advisor, and consultant with a rich background in visual tech, content licensing, business strategy, and technology with more than 20 years experience in developing world-renowned photo-based companies with already two successful exits.