When Facebook first announced that it was purchasing Instagram last year, a lot of folks were afraid it would ruin the popular photo-sharing network. They feared Zuckerberg’s group would come in, add a bunch of ads, and mess up the whole experience.
But here we are, nearly 18 months later, and nothing of the sort has happened yet. Instagram is thriving—in fact, it just announced that it has surpassed 150 million users—and there’s not a single ad in sight. But that doesn’t mean that they aren’t coming…
Speaking with The Wall Street Journal this weekend, Instagram’s director of business operations Emily White talked about their intentions to monetize. They’re already in the process of courting advertisers, she says, and we could see ads within the next year.
“As director of business operations, the 35-year-old Ms. White effectively is the new chief operating officer of Instagram, the point person charged with turning a billion-dollar acquisition that has never made a cent into a real business. Mr. Systrom, co-founder of Instagram, still makes the ultimate decisions, but it is Ms. White who is responsible for courting brand marketers and laying the foundation for advertising.
There are no ads on Instagram, but Ms. White said it should be ready to begin selling ads within the next year.”
Ms. White goes on to explain that her big challenge is to figure out how to integrate marketing without jeopardizing Instagram’s cool factor. She wants to avoid the missteps Facebook encountered in its early ad days, so she frequently consults its top executives.
“After years without ads, Instagram’s big risk is alienating its members—especially its large base of teen and young adults, who are coveted by marketers. Too much overt marketing could clutter the service, undermining one of its strongest selling points.
“Theoretically, [Instagram] could be making hundreds of millions of dollars today, but they would need a big sales force and they would risk polluting the environment,” said Brian Wieser, an analyst at Pivotal Research Group.”
And we’ve already seen a preview of what the fallout could look like, should Instagram’s advertising initiative rub users the wrong way. Back in December, the company caused an uproar when a change in its ToS implied that user content could be used for ads.
So needless to say, Ms. White has her work cut out for her: make Instagram make money without stunting its current insane growth rate. The service has added 20 million users since June of this year, and more than 100 million since the Facebook acquisition.
Another problem she faces is how to sell something that Instagram currently gives away for free. Companies like Nike and Coca-Cola already use the site to run advertisements, and others have begun similar projects since video was introduced this summer.
As of right now, White says her team is playing around with a number of different strategies, including one that revolves around the app’s Discover feature, which promotes popular content, and one the search function, which allows users to look up images or themes
It’ll be interesting to see how this all plays out.
What do you think? What’s your take on Instagram running ads?