Clarifying questions:

• Do we have any specific feature of Instagram that we would like to monetise? (No)
• Are we monetising current Instagram features or building a new feature to monetie? (current)
• Meta mostly runs on an ad-driven revenue, what kind of monetisation did we have in mind? subscription model
• There two user segments involved (consumer , creator) what segment are we looking to monetise? Creator
• Do we have any restrictions when it comes to this strategy (budget / legal / compliance constraints?)

Litmus check:

Is Instagram ready to monetise?

Retention: Instagram is Meta’s one of the most popular products, Almost 40% of Meta’s annual revenue is from Instagram alone. As instagram has advertisement driven revenue, for that you need to have content consumers so this does mean that we have a very strong retention.

Core usage:

• Frequency: Most Instagram users (an average user approx 40%) open and uses Instagram atleast 2-3 times a day. ?
• Breadth: An average user on Instagram consumes reels, posts, stories, DMs (all 4). The creator economy is also a consumer economy on Instagram and vice versa. it’s not exclusive. ?
• Depth: An average on Instagram is atleast 15 minutes long. Most power users spend way beyond that. ?

Willingness to pay:

Conduct user interviews, surveys and polls to identify this point.

There are two aspects to this problem:

• capacity of paying: ask basic questions about their age, demography, Instagram usage, their earning capacity, and how much would they be willing to pay for Instagram. ?
• desire to pay: We need to understand what kind of features would they pay for, we can ask our creators directly or we can do this in the form of ‘Rank Features’

For the first:

Creators on Instagram above a decent following have enough earning from the platform that they can easily pay.

For the second: (How much to charge?)

we will bundle Instagram features and ask the creators to select which bundle would they be willing to pay for. We can do this in the following way:

• Hidden bidding: Don’t disclose what the other’s have bid for the features. Select the bundle which has the most number of biddings and in that select the second highest price.

(We can identify through this how much would they pay)

Both should be there.

Who do you charge?

RFM (Recency Frequency Matrix)

For instagram we should target the following three types of creators:

• Champions: These are the power creators on Instagram, creating content atleast once a day and are also monetising their Instagram profile.
• Loyalists: They are frequent creators and create content atleast 3-4 times a week. They have a decent following & engagement rate as well.
• Potential Loyalists: They are on their way to becoming Loyalists and have identified the creator potential on Instagram.

When to charge?

Perceived value >> Perceived Price

Perceived price for creators: Buying a subscription on Instagram to access creation tools like edit, filters,, reel templates etc.

Perceived value: create viral content, earn a lot of following and engagement, create a steady source of Income.

What to charge?

Access, Time, Shareability, Output.

Instagram’s model mostly works by providing access and shareability of content

We should charge for:

• access to content creation tools (time based subscription for a month)
• Shareability (You can only post content say 4 times a week, in this subscription model)

How will we show the pricing?

Bundle a couple of features and create 3 bundles atleast and price them according to the top 3 bids that you received. Each bundle would have a variation in terms of access and shareability.

For eg: Bundle 1: You can use only filters/ editing tools and create content upto 2-3 times a week (Priced lowest)

Bundle 2: You can use filters/ editing tools/ reel templates (but not livestreaming) and create content for 4-5 times a week

Bundle 3: All features, unlimited content (priced highest)

 

• Middle effect: Place the bundle that you want to be sold the highest in the middle (cognitive bias). You are selecting on behalf of your users.
• Strikethrough pricing: Give an illusion of a discount to the user.
• Launch plans for longer duration and give the user the benefit of opting longer plans (annual subscription over monthly). This would ensure that your user stays for a longer time.
• System 1 vs system 2 design. Instagram being a low order value subscription should ideally have system 1 design. But for the launch we need to inform the user of all the features they would be getting with this subscription so we will opt for system 2 design in the initial phases. (High effort, more comprehensive, logical and rational decision)