Nike (NYSE:NKE) has established itself as one of the top-five most followed brands on Instagram, which is owned by Facebook (NASDAQ:FB). To you, Instagram might just seem like another social media site, but it's so much more. In fact, according to the Pew Research Center (opinion polling, demographic research, media content analysis), most Instagram users are between the ages of 18 and 29 ... and wealthy. Therefore, brands like Nike have an opportunity to connect with young and wealthy consumers on the site for lifelong sales.
Furthermore, if you head over to Alexa.com (a global analytics site owned by Amazon), then you will see that Instagram now ranks No. 38 for online global traffic, as well as No. 21 domestically. Over the past three months, the site's bounce rate (when a visitor views one page and leaves -- a bad thing) has declined 5%, pageviews-per-user has increased 6.6%, and time-on-site has climbed 9%. These are strong numbers that demonstrate continued and healthy growth.
You might be wondering how Nike established such a strong presence on one of the most important social media hangouts from a consumer perspective. Hint: it didn't do so by posting pictures of its products. Nike is much smarter than that.
A savvy approach
Nike has figured out the most important aspect of online marketing, including social media. When you make your marketing about the consumer -- getting them involved -- it's likely to lead to much greater traction than that provided by traditional marketing.
According to Nitrogram's (an analytics firm that compares brand performance on social media) Thibaut Davoult, Nike's "PHOTOiD" was arguably the most successful marketing campaign ever to take place on Instagram. He specifically stated, "It gave fans the opportunity to get creative by designing their own Nike shoe online and selecting one of their Instagram photos to go along with it." This marketing campaign included social sharing buttons for the most popular social media sites, which led to broader exposure.
When Nike isn't involving its customers and potential customers in its Instagram marketing campaigns, it's posting unique pictures with its products which often entail a scenic and mesmerizing landscape or a product in use. You can see Nike's Instagram page here: http://instagram.com/nike
However, is Nike the most popular brand on Instagram?
Nike is currently ranked No. 4 for most Instagram followers in the "Brands" category. The No. 1 through No. 3 spots belong to National Geographic (majority owned by News Corp.), Victoria's Secret (owned by L Brands), and The Ellen Show. The No. 5 through No. 10 spots: Forever 21, 9GAG (image-based social media site), Louboutin, Starbucks (NASDAQ:SBUX), MTV (owned by Viacom), and the NBA.
Therefore, if you want to know what brands are potentially resonating best with today's young consumers, the answers are right above you. As far as Starbucks is concerned, on Instagram it takes a similar approach to Nike. It finds customer photos and then reshares them. Once again, this involves the customer and makes it about them, which they love. If someone receives positive reinforcement somewhere, they're likely to return to that location. This then increases brand recognition for Starbucks. You can see the Starbucks Instagram page here: http://instagram.com/starbucks#
Another company that should be noted is Michael Kors (NYSE:KORS). It ranks No. 12 for most followers on Instagram, but during New York Fashion Week, it gained just shy of 17,000 followers in less than 24 hours. This further proves that Michael Kors continues to grow, primarily through brand recognition via word of mouth and social media exposure. If young consumers fall in love with Michael Kors -- which appears to be taking place -- then it's likely to lead to continued market share gains versus companies like Coach.
The Foolish bottom line
If a company wants to see long-term success, then it must establish a presence among young consumers. Instagram is currently one of the best ways to do this, and Nike, Starbucks, and Michael Kors are all performing exceptionally well in this area. If these companies can establish connections with young consumers, then these consumers are more likely to remain loyal to these brands throughout their lives. Please do your own research prior to making any investment decisions.
Dan Moskowitz has no position in any stocks mentioned. The Motley Fool recommends Amazon.com, Coach, Facebook, Michael Kors Holdings, Nike, and Starbucks. The Motley Fool owns shares of Amazon.com, Coach, Facebook, Michael Kors Holdings, Nike, and Starbucks. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.