Instagram has finally reached its 150 million users a day, as the photo sharing service which was purchased by Facebook last year reportedly plans to start featuring ads by the end of this year.
According to a blog post from Instagram, 50 million new users have joined the service in the last six months. The service’s mobile app has become incredibly famous among Apple prodution’s users and fans of Google Android devices.
By the way, Facebook has previously pushed forward the idea of introducing ads on the photo serice to justify its investment, but never with a firm timeline.
“Kevin [Systrom] has always been clear that we’re building Instagram to be at business and that we expect that over time we’re going to generate a lot of profit from it and probably through advertising,” Facebook’s CEO Mark Zuckerberg said in July.
“Now that all said, right now it’s just growing still quickly,” he added.
The Wall Street Journal has contacted with Emily White, Instagram’s director of business operations, who confirmed the plans to introduce that ads within the year. “We want to make money in the long term, but we don’t have any short-term pressure,” she explained.
According to analysts, after ads-less years, the service’s biggest risk is alienating its members—especially its large contignent of young users, who are coveted by marketers.
As The Wall Street Journal writes, “too much overt marketing could clutter the service, undermining one of its strongest selling points.”
When Instagram was launched about three years ago, its owners and CEO didn’t need to worry about how it would eventually make money.
Brian Wieser, a senior analyst at Pivotal Research, explained that it’s similar to the business models for other digital products and services “Getting ubiquity first and revenue later is perfectly appropriate,” he told reporters. “Twitter wasn’t seeing any revenue early on, and it wasn’t necessary back then.”
“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,” Wieser added.
However, the time when the extremely popular photo serie doesn’t have to worry about monetizing itself might be coming to close. “Facebook made an investment in the platform that Instagram built,” said the analyst. “At some point, Instagram needs to generate revenue.”
The expert went on, explaining that Instagram can avoid spamming people’s feeds with sponsored content.
“When a company first chooses to monetize, the ads need to be both unobtrusive and native to the platform,” said Wieser. “Instagram is at a stage where they’re going experiment with different ad products.”
“Brands always demand metrics,” agreed John Manoogian, co-founder of 140 Proof, a social-advertising service. “As it becomes a real advertising platform, they will be held to traditional standards, brands will want to see how these photos and videos tie back to their sales objectives.”
By the way, there’s some doubts that de facto ads are already thriving on Instagram. Brands like Nike, Starbucks and Victoria’s Secret already have million-person followings– all without paying a cent for ad space.