Pinterest and Instagram Offer Buy Buttons

In early June, two visual social media networks, Instagram and Pinterest, linked e-commerce capabilities to their respective platforms. Pinterest now offers blue Buyable Pins to brands on its site, and Instagram plans to add a Shop Now button on its site. With the new features, users can access company-run e-commerce sites directly from images displayed on the social pages.

Facebook, Twitter, and Google have offered buy buttons on their networks for some time. Though it took a while to get Instagram and Pinterest on board, the development doesn't come as a total surprise, considering what retailers stand to gain from such a connection. "Buy buttons are the next phase of the business model," says Ray Wang, founder of Constellation Research. "With content monetization strategies in place, the next step is to complete the campaign-to-commerce life cycle."

David Moth, social media manager at eConsultancy, notes that social networks are under constant pressure to generate revenue. "Pinterest and Instagram are only just beginning their efforts at monetizing their massive user bases, so it's no surprise they're trialing different features alongside traditional ad units."

Since visual social media platforms are becoming more popular by the day, brands are looking to monetize their presence there. Facebook-owned Instagram boasts over 300 million monthly active users worldwide, and Pinterest is no slouch either, tallying over 70 million monthly active users. Already Macy's, Neiman Marcus, Michael's, and Nordstrom offer buy buttons on their Pinterest feeds, recognizing the advantages of linking commerce to such thriving channels.

"Pictures drive action," says Brent Leary, cofounder of CRM Essentials. "If you are selling shoes or anything like that, having the right picture to showcase them and spark the media action [can be highly effective], with Instagram and Pinterest having huge audiences."

Leary also highlights the degree of influence that the platforms' users can have. "Entertainers are using Instagram and Pinterest just as much as anything else now," he says. "When they post a picture, it sparks a lot of interest. If they're wearing [an article of clothing they like], they're going to post a picture of it on Instagram, and that's going to make a whole bunch of other people want that thing as well."

Embedding buy buttons into these platforms can help companies determine the payoff from investments they make on various social channels. "Establishing ROI of ad spend is really hard if you don't have something to close the loop in the process," says Michael Fauscette, group vice president of software business solutions at IDC. "Having a [buy now button] certainly does that, so it may help, from a metrics perspective, in understanding if [a company's] ad spend is really effective."

And though once perhaps considered a nuisance, the presence of brands on social media is something to which people have largely become accustomed. "A lot of us are conditioned to be inundated with ads across all the social networks that we use," Fauscette says. "Unless [an ad is about] something that you were already thinking about or happened to be interested in, you probably just ignore it anyway."

Pinterest seems prepared to tackle e-commerce, but analysts agree that Instagram needs to tread more lightly. "It seems that Pinterest at its foundation was a little more commerce-ready than Instagram," Leary says, noting that Instagram began as a platform for connecting friends and family. "They intended that for a while."

"On Pinterest, people are looking to make a buy decision," Fauscette agrees. "[Companies using Instagram], on the other hand, [have] to be more careful because it's a different sort of network"—more personal, less product-oriented.

Brands that intend to use these channels to sell need to be ready to meet high customer expectations. If companies promise immediacy, they'd better be able to act on it. If someone influential posts a picture of a product and the company has too little in stock, or the Web site crashes, or the delivery time is not up to par, people might take to social media to voice their frustrations with the brand, Leary says. "That kind of thing can snowball if you're not set up with the right processes in place to handle the load," he adds.