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Instagram adds 'Black-owned' label option to business profiles

Instagram has been key to customers finding Black-owned businesses to support and for those businesses to get new customers. And now the platform is strengthening that relationship.
A post on Stormi Steele's Canvas Beauty Brand's Instagram account. Steele raked in $20 million in revenue in 2020, and is on track to hit the same number for 2021.
A post on Stormi Steele's Canvas Beauty Brand's Instagram account. Steele raked in $20 million in revenue in 2020, and is on track to hit the same number for 2021.Courtesy Canvas Beauty Brand
/ Source: NBC News

Stormi Steele posted a video on her social media accounts in 2017 of how to use Black hair products she created herself with $800 of capital.

Her homegrown business, Canvas Beauty Brand, later brought in $435,000 in profits through a single $100 paid social media advertisement. Steele said even with this rapid progress, buyers were still asking the same question: Is this Black hair care brand Black-owned?

Instagram has been key to customers finding Black-owned businesses to support and Steele said it has been integral to her business’s growth. And now the platform is strengthening that relationship between customers and Black-owned businesses.

Instagram announced Wednesday its new “Black-owned” label that U.S.-based businesses like Canvas Beauty can add to their profiles. The company and Steele said the label will make it easier to find Black-owned businesses.

“People still ask, ‘Is this Black-owned?’ I think it’ll get rid of that question and it’ll make our consumer, the woman and the person that we market to, trust us,” Steele said. “It helps us to not have to continuously reiterate we're Black-owned, because that's the difference between the conversion or not, most of the time, especially to the customer who wants to know that answer.”

Business accounts can select to display the “Black-owned business” label in their bios, and may be included on the Shops page.

Instagram does not have concrete numbers regarding how many businesses are expected to enable this feature. But more than 1.3 million Instagram posts included “Black-owned” or “Black-led” during the height of the racial reckoning in summer 2020 and through the fall. And the number of U.S.-based businesses that listed these labels in their profiles increased by 50 percent during that same period.

“There was a lot of tragedy happening in the Black community,” said Rachel Brooks, a product manager at Instagram on the equity team who worked on developing the label. “On top of that, there was a global pandemic raging, and a lot of challenges particularly with Black-owned businesses being able to stay open, maintain livelihoods, those sorts of things. And so what we saw is the community really rallied around Black-owned businesses somewhat naturally and organically by using #BuyBlack and all sorts of other ways of amplifying Black-owned businesses.”

That rallying prompted Instagram to develop an official label to support this specific interest, adding structure and making it easier for users to search for businesses, she said.

“When you see a profile, you know where the name is, you know where you can find the post, you know where you can find the stories or whatever it might be,” Brooks said. The idea is to create a standard so that people know how to consistently find the information. Otherwise, people are kind of fishing for this information.”

Brooks said the label will not contribute to what information the algorithm takes into account. But subsequent engagement with related accounts will do so. Instagram’s algorithm considers what type of content users previously liked, viewed or shared and uses that pattern, among other things, to present personalized content to users, then-director of product management Julian Gutman told TechCrunch in 2018. So accounts keeping tabs on Black-owned businesses are more likely to see them in their feed, giving the businesses more exposure and potentially increasing their revenues.

Steele raked in $20 million in revenue in 2020, and is on track to hit the same number for 2021. The first video she put money behind became a viral video and effectively launched Canvas Beauty. Since then, she’s used paid and unpaid advertisements on Instagram and other social media sites, she said.

“When you're doing ads, the more viral you can make that content, meaning that it'll go viral on its own without paid media, the better it’s going to do when you do pay,” she said. “I began to learn more about the type of content that resonates and is worth to spend on advertising. And I just started to make more and more content. And I found out I had a really good knack for creating content that wasn't standard. And it wasn't in templates. And in the paid media space, the more you can stand out the more you can get people's attention in that first three seconds, the higher converting your ad will be. And that's the name of the game.”