Research Research: The Adoption and Use of Instagram by the Inc. 500 and the Fortune 500

Nora Ganim Barnes, Ph.D.
nbarnes@umassd.edu

Caroline Daubitz, MBA Candidate
cdaubitzcdaubitz@umassd.edu

Instagram was launched in 2010 as a free mobile app for photo sharing and social networking. It enjoyed rapid growth, fueled by Millennials, and had a million active users just two months after its launch. It currently boasts over 300 million active users. Facebook purchased the platform in 2012 for approximately $1 billion. (https://business.instagram.com)

While this highly visual platform’s rapid growth can be attributed to young people, it has also attracted the attention of businesses. This report focuses on the adoption and use of Instagram among 2015’s most successful companies. The first group looks at the fastest growing businesses in the US, the Inc. 500 (named by Inc. Magazine) while the second group looks at the wealthiest businesses, the Fortune 500 (named by Fortune Magazine).

The Inc. 500 list represents the most comprehensive look at the most important segment of the economy—America's independent entrepreneurs. Companies such as Yelp, Pandora, Timberland, Dell, Domino's Pizza, LinkedIn, Zillow, and many other well-known names gained early exposure as members of the Inc. 500.

The Fortune 500 is a list compiled by Fortune Magazine raking the top 500 public corporations of the US as measured by their gross revenue. These leaders command wealth and power and often define the path for global business.

The University of Massachusetts Dartmouth Center for Marketing Research has followed the adoption and use of social media tools in both these groups since 2008. The most recent iteration of the annual benchmarking reports showed Instagram to be the fastest growing social media platform with 22% of the Inc. 500 and 30% of the Fortune 500 now active users.

These early adopters are worthy role models for businesses that are considering the integration of Instagram into their social media strategy. While the Inc. 500 are typically small and young as well as fast growing, those using Instagram do share characteristics with their large, wealthy and more established Fortune 500 counterparts. This report will examine the commonalities of those who have adopted Instagram and their use of it. It will also look at the ways each group has tailored the use of the tool to meet their company goals and objectives. Rank, content, frequency of posts, replies, hashtags and number of followers will be examined for every company with an active account. Similarities and differences will be noted.

METHODOLGY

In this study, a business was considered to have an active Instagram account if there was a corporate account with a post in the past 30 days (data was collected July, 2016). For the Inc. 500, 110 (22%) have active accounts and 149 (30%) of the Fortune 500. Posts were tallied and followers noted. Use of hashtags and propensity to reply to comments received on posts were reviewed. Each account was assessed for its goal orientation. Accounts were considered primarily to be informational, establishing a position of thought leadership, for product promotion, to engage or interact with followers or to share company happenings or events. The definitions used for classification were as follows:

1. Informational – Posts include up to date information about the company and its goods and services.
2. Thought Leadership – Posts consist mainly of new ideas and innovation within their industries.
3. Product Promotion – Posts consist of features and emphasize the product/ service being sold.
4. Engagement/Interaction – Posts prompt responses and interaction from followers. Often targeted toward a specific group of followers or consumers.
5. Company Happenings/Events – Posts consist mostly of company employees participating in events and activities.

HIGHLIGHTS

• Rank influences the adoption of Instagram. Forty-four percent of the top 200 on the Inc. 500 list and 49% of the top 200 on the Fortune 500 list are active Instagram users.
• Those in the consumer products and retail/consumer products industries hold the most active Instagram accounts.
• Nike extends its dominance of social media sites with over 40 million Instagram followers. Lesser known Inc. 500 companies capture 1-2 million followers for the most active companies.
• Approximately ¾ of all posts in both groups receive 1-30 comments from consumers. Half of the Fortune 500 group replies to comments while 33% of the Inc. group does.
• For the Fortune 500, the objective of using Instagram is to disseminate information about their products/product lines, brands, specs etc. and for product promotion. For the Inc. 500 companies, there is almost an equal emphasis on product promotion and sharing company happenings/events. They also engage in posting content that demonstrates thought leadership in their industry.

RANK

Rank influences adoption of Instagram. Among those ranked in the top 200 of each group, 44% of the Inc. 500 and 49% of the Fortune 500 have active accounts. This influence of rank is consistent with the adoption of other social media tools as well.

(See www.umassd.edu/cmr/socialmediaresearch for annual studies on these groups)

POSTS

Those in the consumer products and retail industries hold the most active accounts. The most prolific of them have over 4,000 posts to date. Jane is the #1 ranked retail company in America on the 2015 Inc. 500 list and has the most active Instagram account among this group. Kill Cliff, which markets sports recovery drinks, topped all non-alcoholic beverage brands on the Inc. 500 list and has 3,841 posts.

Footlocker tops the Fortune list of most active Instagram users with 4,710 and Live Nation Entertainment follows with 3,841 posts. The top 10 most active companies are listed below for each group.

Top 10 Inc. 500 Companies Based on Instagram Posts

Top 10 Fortune 500 Companies Based on Instagram Posts

REPLYING

The Instagram users in the Fortune 500 are more likely to reply to those who comment on posts than their Inc. 500 counterparts. Half of the Fortune group replies to comments while 33% of the Inc. group do.

MAIN GOAL

More than half of the Fortune 500 Instagram users post information about product specs, product lines, new products etc. It is their central mission followed by product promotion. For the Inc. 500, their goals appear to revolve around promoting products while introducing themselves through posts on thought leadership and company happenings. Both use Instagram differently than they use other platforms like Facebook which is predominantly used for interaction and engagement.

COMPARISON

The companies in the Fortune 500 are more likely than the Inc. 500 to use Instagram (30%-22%). They also have more followers even though they post at about the same rate. The Fortune 500 are more likely to reply to comments than the Inc. 500 users (50%-30%). For the Fortune 500, the objective of using Instagram is to disseminate information about their products/product lines, brands, specs etc. They also use it for product promotion. For the Inc. companies, there is almost an equal emphasis on product promotion and sharing company happenings/events. They also engage is posting content that demonstrates thought leadership in their industry. Those using Instagram in both groups are more likely than their peers who are not active on Instagram to use Pinterest, Twitter, Facebook and to have a blog.

CONCLUSION

Instagram has an important role in the social media strategy for top businesses. These companies are adopting it at a record pace and are active in posting, using hashtags and replying to comments. They are using Instagram to inform consumers and promote products, as well as to make a name for themselves, especially if they are a newer or lesser known company.

Instagram is projected to bring in $2.81 billion in mobile advertising revenue world-wide by 2017. One third of American teens consider Instagram the most important of their social networking sites. Businesses are adopting Instagram and using it in addition to other tools to create a more comprehensive social media strategy. For now, Instagram is the darling of the social media platforms and businesses are diving in to connect with some of its 300 million active users.

ABOUT THE AUTHORS

Nora Ganim Barnes, Ph.D.
Nora Ganim Barnes is a Chancellor Professor of Marketing and Director of the Center for Marketing Research at the University of Massachusetts Dartmouth. Nora has worked as a consultant for many national and international firms. Working closely with businesses in the Northeast US, Nora and her students have provided marketing research assistance to hundreds of small businesses.

She has published articles in academic and professional journals and proceedings, has contributed chapters to books, and has been awarded numerous research grants. Her work has been covered online and in print by Business Week, the NY Times, Washington Post, CNN, Reuters, Wall Street Journal, Fox News, Computer World, Time Magazine and the Harvard Business Review among others. She has been named Co-chair of Research by the Society for New Communications Research.

Dr. Barnes is a frequent speaker at corporate meetings and keynote at conferences. She can be reached at nbarnes@umassd.edu.

Caroline Daubitz, MBA Candidate
Caroline Daubitz works as a Graduate Assistant in the Center for Marketing Research at the University of Massachusetts Dartmouth. She had conducted research for local businesses and has studied the 2015 Inc. 500. She can be reached at cdaubitz@umassd.edu.