It only seem like a few weeks back that we were reporting on Instagram’s decision to proceed with its carefully touted softly, softly approach to mobile advertising; and this month it’s taken the process a big step forward by signing its first deal with an ad agency: New York-headquartered giant, Omnicom.
You don’t need to be a veteran of media jobs in mobile advertising agencies to appreciate that a $100 million deal is pretty sizeable. The many brands working with the media and creative agencies constituting the Omnicom group can now access Instagram as an extra medium for their advertising campaigns, at least for the next year, which is how long the deal currently lasts for.
Testing the waters
Much of the last year was spent by Instagram trying out advertising from brands like Levi’s, Lexus, Ben & Jerry’s, General Electric and Michael Kors. Again, you don’t need to be a genius in the world of mobile advertising to figure out why it took the step: eMarketer’s figures show in 2013 that the global mobile advertising market expanded by 105.9 percent, skyrocketing from a size of $8.8 billion in 2012 to $18.8 million. The growth of the U.S. mobile ad market was even more spectacular at 122 percent (taking it to $9.68 million).
The Omnicom deal will see ads, from static photos to videos, added into Instagram users’ feeds. In line with Instagram’s promise not to introduce obtrusive advertising, they’ll be meticulously selected and manually (rather than automatically) bought and curated. It’s likely that the video ads will prove the most lucrative: the medium has long been known to command the highest levels of engagement and monetization. That’s probably why they’ve been popping up with gusto on just about all digital entities supporting video, from news sources to YouTube.
Instagram is insisting that the ads it will permit will be fully in keeping with the quality of its user-generated content. The jury, however, is still out on whether users will grow to love beautiful artistic ad creations or vote with their feet and use another platform for sharing their content.
Ad partnerships, Instagram maintains, will be held down to a small number of select partners. Rumor has it that another giant, Publicis Groupe’s Starcom MediaVest, is in talks to become one of them.