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March 10, 2014

Instagram Signs $100M Deal With Major U.S. Advertising Firm

Instagram has signed a $100-million deal with U.S. advertising firm Omnicom Group, signaling more ads will be popping up this year in the network’s news feed.

The Facebook-owned photo and video service has been easing into the advertising game over the past few months to give its 150 million monthly users a chance to get used to seeing ads in their feeds. So far, Instagram has partnered with fashion label Michael Kors, Ben & Jerry’s, Levi’s, Adidas, Lexus, PayPal and Burberry.

The deal with Omnicom, however, means Instagram users will soon see ads in their streams from brands that work with Omnicom’s media and creative agencies, AdAge is reporting.

Screenshot of Michael Kors ad on Instagram.

Screenshot of Michael Kors ad on Instagram.

“This is an exciting new chapter and we’re looking forward to the great creative content that comes out of this partnership,” Instagram director of market operations Jim Squires said in a statement to AdAge.

“Our teams are going to work hand-in-hand to develop and execute campaigns that provide people with amazing imagery — and drive meaningful business results for advertisers.”

Ads in the news feed will be controlled so they remain in the stream longer than a day, even if the user logs in or out, an executive told AdAge. Ads will run in both image and video form and must be of high quality, in keeping with Instagram’s look.

“People will continue to see a limited number of beautiful, high–quality photos and videos from select brands who already have a strong presence on Instagram,” Squires added.

Instagram kicked off its campaign to better monetize its site last November with an ad from fashion label Michael Kors.

Instagram has promised its users they will retain control of their feeds with the option of hiding ads they don’t like as well as the chance to provide feedback on the changes.

“We have big ideas for the future, and part of making them happen is building Instagram into a sustainable business,” the company said in an October blog post.

“Our aim is to make any advertisements you see feel as natural to Instagram as the photos and videos many of you already enjoy from your favorite brands. After all, our team doesn’t just build Instagram, we use it each and every day. We want these ads to be enjoyable and creative in much the same way you see engaging, high-quality ads when you flip through your favorite magazine.”

Instagram has grown in leaps and bounds since being acquired for $1 billion by Facebook in April 2012. Instagram, which had only 30 million users at the time of purchase last spring, has grown by 120 million users.


Jennifer Cowan is the Managing Editor for SiteProNews.