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150 Million Now Use Instagram, Company Eyes Advertising Revenue

September 9, 2013

Michael Harper for redOrbit.com – Your Universe Online

Instagram is set to begin running ads in users’ feeds, a move many have been expecting since its famous $1 billion buyout by Facebook in 2012.

According to a recent Wall Street Journal report, Instagram’s head at Facebook, Emily White, is already looking to sign on advertisers to the photo sharing network. This could be a difficult task, of course, as many brands already use Instagram as a part of their marketing campaigns without paying a dime for the space. Instagram also announced it now has 150 million users, a number that could entice potential advertisers.

Despite the immense push-back following its acquisition and controversial privacy policy changes last December, Instagram continues to woo new followers. In February, for instance, the social site announced 100 million people actively use the service every month. In June the number had jumped to 130 million. Though many have appreciated the lack of ads in their feeds, Facebook and Instagram are both eager to turn this 150 million machine into a money maker.

Instagram’s director of business operations Emily White made her move from parent company Facebook in March with orders to find a way to launch advertising on the photo sharing network. Though Kevin Systrom, co-founder of Instagram, has the final say in all decisions, White is working closely with him to bring in ad dollars.

“We want to make money in the long term, but we don’t have any short-term pressure,” said White in her interview with the Wall Street Journal.

Though she didn’t offer any exact timeline, she said she plans to start selling ads on Instagram within the next year.

As noted in the Journal report, brands such as Levi Strauss, Lululemon Athletica and Nike are already using the service to send out pictures and hashtags as a way to get involved with their customers. These companies aren’t paying any fee to use the service in this way either, though they work closely with Instagram to build out their ads. For instance, Levi Strauss’ latest marketing campaign features artists and musicians traveling by train across the USA. The train cars are outfitted with cameras meant to snap pictures and videos and send them to the Levi Strauss Instagram account. Instagram helped set up these cameras (the service is only available on smartphones), but Levi Strauss didn’t pay any extra for this help. The clothier called Instagram a “high priority platform,” according to the Wall Street Journal report.

According to White, Instagram is currently looking to provide ads through the Discover portion of the app where users can find the most popular posts on the network at the moment. Users could also find these ads through the search function. White mentioned building these Instagram ads to act as clickable links, meaning an ad for Levi jeans could take the user straight to a webpage to buy the denim instantly. Her hesitation, however, is the quality of many mobile sites on the web at the moment. White is also cautious to learn from Facebook’s mistakes when it began to roll out advertising, saying Facebook created too many options for advertisers.

One form of advertising simply got Facebook into some hot water with users and later, a California court. Following a class action lawsuit, Facebook agreed to settle with users and pay them $5 for each instance the social giant used their picture in a “Sponsored Story,” or ad with their knowledge.


Source: Michael Harper for redOrbit.com - Your Universe Online



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