Facebook’s Instagram Said to Sign Omnicom Ad Deal

Facebook Inc. (FB)’s Instagram mobile photo-sharing service has signed an advertising deal valued at about $50 million with Omnicom Group Inc. (OMC), people with knowledge of the matter said.

The agreement will let brands that work with Omnicom show promotional videos and pictures to Instagram users, said the people, who asked not to be identified because the details aren’t public.

The pact is part of Facebook Chief Executive Officer Mark Zuckerberg’s push to generate more sales from mobile users, which now make up more than half of ad revenue. Instagram, which Facebook bought for more than $700 million in 2012, only rolled out advertising five months ago with brands such as Lexus and Ben & Jerry’s. WhatsApp, which Facebook is purchasing for $19 billion, gets subscription revenue from messaging users and doesn’t advertise.

“Omnicom shares our passion for and understanding of the mobile Instagram community,” Jim Squires, director of market operations at Instagram, said in a statement. “Along with their clients, they’ll help to continue to set a high bar for creative work that inspires people.”

Squires declined to comment on the value of the deal. Daryl Simm, CEO of Omnicom Media Group, didn’t respond to a request for comment. Omnicom’s group of advertising businesses includes BBDO Worldwide, TBWA Worldwide and DDB Worldwide Communications Group.

Instagram’s deal with Omnicom won’t change the photo-sharing service’s advertising strategy, which is to show a “limited number of beautiful, high–quality photos and videos from select brands who already have a strong presence on Instagram,” Squires said.

Advertising Age earlier reported Omnicom’s deal with Facebook’s Instagram.

To contact the reporters on this story: Sarah Frier in San Francisco at sfrier1@bloomberg.net; Edmund Lee in New York at elee310@bloomberg.net

To contact the editors responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net; Sarah Rabil at srabil@bloomberg.net Reed Stevenson

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