About three years ago, Instagram joined the melee of social media sites. The niche of Instagram appealed to users; you could simply have a fun way of sharing pictures with friends and family with the free application. Sharing it among Facebook and Twitter became second nature. Instagram continues to make a powerful impact as it celebrates its 150 millionth user (a larger percentage of users are from outside of America.) In realizing the level of interaction, the executive team at Instagram is beginning to see the untouched financial potential of their fun application. Enter ads. Yes, Instagram will start selling ads within a year.
Instagram climbed up an impressive ladder and within two years sold for $1 billion dollars. The infamous buyer? Facebook. An analyst who works for Pivotal Research Group stated that with the amount of users gracing Instagram’s pages, the company is losing millions of dollars from not selling ads. The audible groan from users can be heard across the rippling ad-filled world of social media.
Users of Facebook were angered and continued to remain so when ads starting appearing on the most popular social media site. Many users didn’t mind the sidebar, header or footer ads, but some users were unhappy with their news feeds promoting products and services as they logged into their profile. With over 150 million users, moving to sell ads is an appealing factor and a logical business mind would almost call Instagram foolish not to do so.
Earlier this summer, Facebook celebrated its one millionth advertiser and while the social media giant cheers over its billion dollars in revenue, users grow more irate. Facebook was favored by so many because of the ingenuity and seamless interactivity. Now, when logging into the site, it has become inundated with ads from the start of the landing page. Of course, users can opt-out of many of these ads from their settings.
It appears Instagram is taking a page from its purchaser to start selling advertising space within the next year. Why the wait? Last year Instagram was feeling a bit warm under the scathing critique of their users after a change was made to the terms of service. The edit allowed Instagram “perpetual rights” to sell user photos without notice and without compensation. The cry against these new terms reflected anger from the community.
CEO Kevin Systrom released a blog post advising the terms and conditions would be reverted to its original stance. At the time, Systrom side-stepped the issue and stated the team would work together to “complete our plans” and then explain to users how the advertising business end would work. It seems that plan may be in the works with the recent announcement. The scolded CEO stated Instagram would also never sell user’s information and agreed the language was confusing.
Up to this point, the app creator has gained fan appreciation for the seamless interactivity Instagram offers users. Over the course of the next several months one can imagine the ads will start becoming a presence. With over 150 million users and counting, Instagram finds themselves in a catch-22. They would be considered foolish to not sell ads for their space, but what degree of “no” are they willing to accept from users? Users additionally must expect that with demand comes a company’s interest in making a profit, especially for Facebook who invested in the site. What are your thoughts on Instagram’s recent announcement to sell ads?