Source: Instagram via Bloomberg

Instagram Expands Ad Offerings

The Facebook-owned photo app is opening up to more than two million advertisers

Your Instagram feed is about to get a bit more commercial. The Facebook-owned photo app says it will open itself to more advertisers and provide more precise tools for targeting users.

“We’re focused on three key areas,” Instagram writes in a blog post. “Expanding ad offerings to include action-oriented formats, enabling more targeting capabilities, and making it easier for businesses large and small to buy ads on Instagram.”

The biggest news is that Instagram will allow companies to link directly to actions, enabling users to, say, buy a product with a tap, or download an advertisers' app from directly within the ad. The feature was sorely missing when the company first rolled out advertising about 18 months ago. Instagram has also worked closely with Facebook on developing new targeting options. Advertisers will now be able to reach users based on their interests and demographics, just like on the world's largest social network. In return, Instagram will give users mechanisms to fine-tune the ads they see.

Finally, Instagram will release ad-specific developer tools to make ads more accessible to a larger number of businesses. “There are more than two million advertisers who actively use Facebook to market their business, and we want to leverage the best of Facebook’s infrastructure for buying, managing and measuring the success of ads on Instagram,” the company says.

Research firm EMarketer says this is a big deal for advertisers. “These updates completely change the character and nature of Instagram advertising,” says Debra Aho Williamson, principal analyst at EMarketer.

Instagram hasn’t revealed revenue figures, but Facebook made $7.42 billion in mobile advertising in 2014, a number that includes Instagram. That accounts for a whopping 17.4 percent of the total $42.63 billion global mobile ad market, according to eMarketer estimates. 

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