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Instagram is being used by more small businesses. According to our Local Commerce Monitor ™ social media, especially newer channels like Instagram, are very appealing to small businesses. In our survey 11% of SMBs say they use Instagram and the majority report seeing good (5-9 times spend) to extraordinary (over 20 times spend) ROI with Instagram. While Instagram’s focus has been on products for brands and larger companies, the move to providing tools for small businesses (they have over 200,000 businesses on Instagram) is not surprising. According to our survey 88% of SMBs spend between 1 to 10 hrs a week marketing on social media, including Instagram. Instagram’s new tool set includes a free business profile with contact button (click to call, text, email), insights on performance of paid and profile, and promote function which can turn posts instantly into an ad.

Offering SMBs tools to manage their marketing efforts is a good opportunity to convert free users to paid advertisers as SMBs are increasing their spend on social advertising.  Across our sample of SMBs (the Core* and Plus* spenders), Instagram accounts for a small amount of their overall budget (most social ads are lower cost than other channels). In the survey our Core SMBs* spend 0.7% of their add budget on Instagram – fifth in spend among social media channels (behind Facebook, Twitter, Pinterest, Linkedin). Plus Spenders* allocate 1.3% of their ad budget for Instagram, ranking third among social channels. Social as an advertising channel is growing in spend among SMBs, around 12-15% of total ad budget goes to social. As more SMBs get comfortable with the ad products social channels like Instagram are offering we will continue to see the growth in SMB use and spend.

*Core SMBs spend <$25,000 annually on advertising and marketing, Plus spend $25,000+

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