Instagram’s Changes Could Leave Influencers Heartbroken

Instagram’s Changes Could Leave Influencers Heartbroken

Social-media celebrities might not like their bottom lines as Facebook works on changes to its platforms to focus on privacy and safety for its users, which could limit revenue from popular posts

By Laura Forman and Lauren Silva Laughlin Updated Aug. 16, 2019 11:31 am ET

We’ve gone from the face that launched a thousand ships to those that prompt a billion clicks. Tampering with the raw ingredients for such online popularity could cost a social-media company like Facebook FB’s Instagram a great deal of money.

Influencers—social-media celebrities who can spark buying decisions—are akin to huge businesses in their own right. Companies pay some $2 billion annually to individuals who promote their brands on Instagram alone, according to Instagram tool Hopper HQ. Reality-television star and billionaire Kylie Jenner purportedly earns $1.2 million each time she shares a captioned photo with her more than 143 million followers. Kim Kardashian West earns just shy of $1 million per post on the platform, while siblings Khloe Kardashian and Kendall Jenner rake in hundreds of thousands of dollars each, according to Hopper HQ.

You can’t buy stock in a Kardashian—at least not yet—but you can own the next best thing. Celebrities have established a symbiotic relationship with Instagram, which Facebook bought in 2012 for $1 billion. Various estimates have pinned its value at as much as 100 times that purchase price today. That calculation may be more than an academic exercise if political pressure on technology giants ever causes them to be broken up.

But there is a more immediate question, too. Under pressure, Facebook has been working this year to make significant changes to its platforms to focus on privacy and safety for its users. In a recent test, Instagram has been hiding publicly viewed “likes” in several markets. Though it was touted as a way to decrease social pressure and improve users’ happiness, the test threatens to upend influencers’ business models and could boomerang to hurt Facebook itself.

Instagram says it doesn’t receive compensation directly for the sales it enables through hosting influencers’ posts. Instead, it basks in the traffic they bring. The more people engage on their platform, the greater its value to advertisers.

Under the test, influencers can still view their own likes—key to demonstrating their value to the brands that bankroll their fabulous lives. The problem, though, is that popularity begets popularity. In an article published in May in Psychology Today, Pamela Rutledge, a professor of media psychology at Fielding Graduate University in Santa Barbara, Calif., explains that likes are a form of social proof—the more likes, the more likable something is and the more it is worth.

Facebook said last year that Instagram had reached a billion monthly active users. According to a 2019 survey from Pew Research, 63% of users check in every day, with 42% checking in multiple times a day. There are 4.2 billion likes a day on Instagram, according to social-media analytics company Sprout Social, suggesting the feature itself is well-liked. Cementing the concept of likes as social proof, the most-liked photo ever on Instagram is one of a brown speckled egg, which has racked up 54 million since January, when it became the sole post from @world_record_egg, an account with the expressed goal of taking the top spot from Kylie Jenner.

Tweaking how Instagram works might cost the Kardashians and many lesser-lights in the like-o-sphere some profit, but influencers aren’t likely to flee unless Instagram suddenly starts charging them—something it hasn’t indicated it would do. Other than Facebook itself, there is no competing platform that offers comparable reach.

Still, diluting Instagram’s value proposition could cause bigger influencers like the Kardashians to spend more of their time elsewhere. These stars have their own YouTube channels, television shows and brands. And while there is certainly no shortage of content—with some 95 million photos and videos posted on Instagram daily, according to marketing company Word Stream—content from anonymous people may be less exciting and compelling to users overall. This could, in turn, hurt Facebook’s business. The average user spends 27 minutes a day on Instagram, according to eMarketer—about 10 minutes more than the average American spends reading. Time is literally money when it comes to ad dollars.

Much as it is unclear whether hiding likes will boost or hurt self-esteem, it remains to be seen whether fewer likes could equal less engagement overall on the platform. That is something Instagram will no doubt be monitoring in its test markets before it makes any permanent changes. The result may tell investors just how critical influencers are to Instagram’s model and how interesting users will find lesser lights to be.

It was Andy Warhol who predicted that “in the future, everyone will be world famous for 15 minutes.” It seems for Instagram to lessen reliance on its stars, that prophecy is paramount.


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