Photosharing site Instagram has struck its first advertising deal with the largest advertising company in the world, which means that the 150 million users of the Facebook subsidiary will soon get advertisements.
50 million dollar deal
Facebook will receive 50 million dollars (36 million euro) through the deal with advertising company Omnicom, according to press agency Bloomberg. It was no secret Instagram would get ads, as it had already announced an ad-filled future for its mobile app in October 2013.
Omnicom's high-profile clients like Pepsi, AT&T, Bud Light and Nissan will offer promotional pictures and movies to the 150 million users of the social photo network. European advertisers will also get a shot at Instagram when Omnicom merges with French Publicis later this year.
The new merger, Publicis Omnicom Group, will become the world’s largest communication, pr and advertising firm, with an estimated 26.5 billion euro market value and a main office in the Netherlands.
Generate turnover through users
The advertising deal is part of Facebook’s strategy to generate more turnover through his mobile users, even though the company has to tread carefully. Director of marketing operations Jim Squires emphasizes that the deal will not create an avalanche of tacky ads.
“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,” he said on Advertising Age. Users of Instagram, purchased by Facebook in 2012 for 1 billion dollars, will not get the automated ads that often annoy Facebook users.
It remains to be seen whether Facebook has the same thing in mind for WhatsApp, the newest purchase for an astonishing 19 billion dollars. According to some, it is just a matter of time, while others point out that WhatsApp can move on without ads as it already generates money through subscriptions.