Instagram, the photo/video sharing site, is officially to start rolling out Ads in the US slowly. Video Ads are to come mid 2014 whilst at the moment, Instagram is "ad free".
Instagram is the site where you can use some very cool filters on your pics that makes them look beautiful.....and they work. Owned by Facebook (acquired 2012 for nearly a billion usd), with a guesstimate of 150 million active users, the "Ads" will largely be quality brand photos placed in your feed, whether you follow them or not. But they won't be 'banners'.
However, Instagram are indicating that you'll have some control over what you Ads you see. So they have concerns about the disruption that advertising can cause, especially on a quality site like this. A lot of brands do have already a great presence on Instagram with high followers. Notably fashion brands such as Burberry.
The contextual relevance of Ads is key and in order to deliver effectively on that, data will become key. When signing up for Instagram, that data is fairly basic so that could become the issue for targeting unless they cross-correlate with Facebook usage.
Without the ability to 'click thru' too, it's likely Instagram will just be selling impressions.
Celebs have already actively made sponsored posts for brands such as Nike, without Instagram earning a cent. Although such posts are now required to feature a disclaimer if they're commercial.
Instagram needs to become a stand-alone business and "monetize" (hate that word) its users. Advertising is one way to do that. However, it will be interesting to watch how they strike that balance between annoying people and generating revenue.
Their owner Facebook, is not exactly strapped for cash, so they'll go at it slowly as they've said, with experiment after experiment until they get it right. If not, they may risk their business.
More likely is that they'll get it right and it'll be a good model for other sites too.
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