Facebook makes piles and piles and piles of money. To be specific: $3.5 billion in the first three months of this year.
Instagram Starts Getting Serious About Ads. Expect More Buttons, More Targeting -- And More Ads.
The photo-sharing app is enormously popular, but it hasn’t made much money for Facebook. Yet.
Instagram
Peter Kafka covered media and technology, and their intersection, at Vox. Many of his stories can be found in his Kafka on Media newsletter, and he also hosts the Recode Media podcast.
So it doesn’t need to find new revenue sources from the likes of Instagram anytime soon.
But Facebook has been telling Wall Street that it’s going to start getting real money from Instagram, eventually. So: Instagram is adding more ads, and more ad formats, and more ways to make those ads more appealing to advertisers. More!
Instagram is announcing this, in a vague way, via a blog post which you can attempt to parse yourself. If you’re in a hurry, here’s my translation:
- Instagram is going to start rolling out “direct response” ads, which come with an “action” button, that prompt users to buy something, or sign up for something — or, crucially, install an app on their phones. Eventually, Instagram will get paid when users complete one of these actions. Instagram hinted at this back in March, when it stuck action buttons at the back of its new “carousel” ads and described them as a test. That phase is over, which means you can expect to see ads for Clash of Clans and Candy Crush in your Instagram feed — just like you do in your Facebook feed.
- Instagram is also going to make it easier for advertisers to find you, or someone who looks and acts a lot like you. Right now, Instagram advertisers only have access to comparatively crude targeting tools: They know your age, gender and what country you live in, provided that you told Facebook that stuff. But it’s going to start offering more granular access to the data you generate when you’re on Facebook, and also let advertisers bring in data they have about your activities outside of Facebook. That means much more valuable ads for Facebook/Instagram, and the same kind of precise/creepy tracking you’re used to on most of the Web.
- Instagram is also going to start showing you more ads. Instagram doesn’t say this anywhere in its blog post, but if you think it’s going to create ways for advertisers to spend more money reaching you and not increase the number of ads in your feed, then I’ve got some PicPlz shares to sell you.
None of this will happen overnight. And my hunch is that Facebook will continue to be cautious about changes to Instagram, which has only become more popular since Facebook bought it in 2012 — in part because Facebook hasn’t mucked it up.
But that same popularity — 300 million monthly users, who spend more than 21 minutes per day on the app — makes Instagram such a tantalizing opportunity for both advertisers and Wall Street. It’s amazing Facebook has resisted the ad push as long as it has.
This article originally appeared on Recode.net.
