The service of native advertising in Instagram allows the advertiser to negotiate with bloggers in an automatic mode to post on their blog.
For the placement of native ads, the key factor is the number of blogger subscribers. When the number of subscribers is more than 1 million, the engagement rate is unlikely to be more than 2%. However, with smaller number of subscribers, the involved audience will be larger and engagement rate can reach 7%. Thus, with the same coverage, it is noticeably more advantageous to post in a large number of small blogs than in several large ones. However, this requires a technical solution to get this done effectively. Otherwise, the cost of administration will absorb all the benefits of greater responsiveness.
Business: More than 1500 connected blogs, $30K revenue, and increase by 15% per month, more than 20 advertisers.
Deal: $300K cash-in for growth in Russia, improvement of the product and access to foreign markets.
Deal Industry: Internet
Deal Type: Venture investment