Two springs ago, Facebook acquired Instagram for nearly a billion dollars – and at some point, Facebook is going to have to start seeing a major return on that investment.
Since Instagram’s launch, users have experienced an ad-free experience. We all know that this won’t last forever – we know ads will be coming to Instagram at some point. We also know that the company has been holding off on introducing ads – not because of any lack of interest from potential partners, but in order to focus on growth (at least according to Mark Zuckerberg).
But Instagram is growing. Fast. In fact, the company just announced that they had crossed the 150 million user mark – adding 50 million in the last 6 months alone.
And the monetization drum beats louder.
According to Instagram’s Emily White, we can expect Instagram to start experimenting with ads some time within the next year. White, who came over from Facebook to lead Instagram’s business operations in April, told the Wall Street Journal that “we want to make money in the long term, but we don’t have any short-term pressure.”
When those ad products do arrive, White suggested that they would probably be in the form of search ads or ads built into the popular “discover” tab on the app that lets users surface globally popular content. Of course, from there Instagram could add any number of different ad units from in-stream sponsored posts to promoted accounts to follow.
Whatever the case may be, Instagram has to take some advice from Walter White and tread lightly.
You probably remember that the last time Instagram talked publicly about the possibility of ads, people kind of freaked out. Many users took Instagram’s plans to slightly alter their terms of service as a full on assault on the ownership of their photos. “Instagram is trying to sell your photos!” became the rallying cry of a apoplectic user base
In reality, the language seemed to suggest that Instagram was looking at a new ad product in the same vein as Facebook’s sponsored stories – where brands could pay to promote already-completed actions on the network. For instance, let’s say I took a photo of my pumpkin spice latte at Starbucks, filtered it, and posted it on Instagram. Later, Starbucks would pay to promote that photo in my friends’ Instagram photo feeds.
The outrage was mostly misguided, but Instagram did screw up by attempting to add tricky language to their terms of service without a clear product in mind. CEO Kevin Systrom later apologized for putting the cart before the horse.
“Going forward, rather than obtain permission from you to introduce possible advertising products we have not yet developed, we are going to take the time to complete our plans, and then come back to our users and explain how we would like for our advertising business to work,” he said at the time.
It appears that time is approaching, albeit at a very slow, calculated pace.
Image via Instagram