Instagram has finally explained how its new algorithm works, and this knowledge is a potential gold mine for business.

Instagram introduced a new algorithm which takes into account three factors:

1) Interest: The algorithm determines how interested you’re likely to be in each individual post by first factoring in how much you’ve engaged with similar content in the past.

2) Timeliness: Instagram factors in when the post was published.

3) Relationship: This factors in your relationship with the post creator, based on how much you have engaged with them in the past (have you commented, liked posts, direct messaged and tagged each other in posts?)

Although many were not happy with the new algorithm change, it has been a good one, according to stats. Users went from spending 21 minutes per day in the app to 24 minutes. With the introduction of Stories, people under the age of 25 are spending more than 32 minutes per day in the app. Not just that, but users are seeing more of their friends posts, roughly around 90%, compared to 50% prior to the change.

What does that mean for businesses using Instagram?

One amazing benefit is that

The algorithm gives no preference to personal or business accounts – they are all ranked equally.

This is huge! You have a great chance at getting maximum exposure due to this. It means you have as much of a chance of your posts being seen as a mutual friend. This opens up a huge opportunity to connect with your customers and potential clients.

Another benefit of the new algorithm is that it takes into account interest, which means that you will be targeting people who are already interested in what you are about. This exposure gives you access to numerous soft leads. You are connecting with people who already have shown interest in what you’re selling, so it will be a lot easier making a connection.

The not so good news: This new algorithm change means you will have to put more effort into maintaining your social media account. You can’t just post a picture, add a few hashtags and leave it be. According to the data relationships is a major factor in the new algorithm.

This means you will need to spend time cultivating relationships, commenting on your friends posts, and trying to get them to comment on yours.

Not only friends, but others who may have a similar interest to the service you are providing.

It also means you don’t have access to the world anymore, you only have access to people who have interest in what you are selling. The process to advertise to people who need to be educated about your project or service will be substantially more difficult.

Like it or not, the new algorithm is here to stay. Hopefully this blog helps you understand how Instagram actually works, and how you can use it to your advantage to build our business.

*based on Andrew Hutchinson’s article on Social Media Today