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Instagram Introduces Ads
By: Amanda Markell
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One week ago, Instagram announced on their blog that they will be introducing advertising to their photo and video-sharing app. This strategic move comes seven months after being acquired by Facebook and after three years of rapid growth to its current size of 150 million members.
The Instagram team stated (in the sure attempt to ease the mind of worried Instagrammers), “We have big ideas for the future, and part of making them happen is building Instagram into a sustainable business. In the next couple months, you may begin seeing an occasional ad in your Instagram feed if you’re in the United States. Seeing photos and videos from brands you don’t follow will be new, so we’ll start slow. We’ll focus on delivering a small number of beautiful, high-quality photos and videos from a handful of brands that are already great members of the Instagram community.”
This move shows us that their launch of video capabilities this past summer was not only a technology enhancement to the app but also a strategic move to enhance future advertising opportunities.
Instagram has not disclosed the details — we are still yet to find out when the ads will begin, how long video ad lengths can be, and the expense for ad buys. It is speculated that this launch could be a testing ground for future Facebook video ads.
Intagram is not alone in this endeavor — they have joined Pinterest and Twitter in the next-life phase of social media; a phase where social media brings dollar power to the table. In mid-September, Pinterest began testing with promotional pins. The strategy is very transparent with each promoted pin clearly labeled as such and related appropriately to members’ searches.  
Speaking of dollar power, Facebook purchased Instagram for approximately $700 million in stock, a price that was criticized as too high for what Instagram was at the time. Analyst Arvind Bhatia estimates that with the new advertising Instagram could be bringing in $400 million annually, making acquisition quite the deal for Facebook in hindsight. "The Instagram acquisition was brilliant," said Bhatia. "In today's market, if Instagram was still independent, they would have to pay much more for it."
Let us know @digitalpivot — are you pro or con Instagram ads?

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About the Author
Amanda Markell is a marketer in the Greater Boston Area with a passion for branding, new media, and customer insights. 
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