Instagram, the popular photo sharing app, has started introducing sponsored posts into the feeds of its users.
The ads, from brands such as Cadbury, Sony and Channel 4, started appearing in feeds around a fortnight ago.
Considering the app is owned by Facebook this should come as no surprise and – of course – the introduction was widely criticised by the apps users.
What’s interesting is just how cautious the app owners are being about the introduction of advertisements.
Only brands with a strong existing presence on Instagram are permitted to advertise and all the ads are personally signed off by founder Kevin Systrom and James Quarles, global head of business and brand development.
Quarles has said he wants the ads to appear in feeds and look seamless, similar to turning the pages of a glossy fashion magazine.
This high-end lifestyle approach is further reinforced by the cost of the ads.
Advertising Age magazine recently reported that a month-long campaign on the site is likely cost anywhere between $500,000 and $1m.
Instagram has no rate card. Instead ads are priced depending on factors such as target age, sex and location.
It’s likely this high cost will price everyone but the biggest brands out of the market.
This approach is the polar opposite to Facebook’s advertising policy and the reasons why are becoming increasingly clear.
In the same week that ads starting appearing in Instagram feeds a new social network broke onto the scene.
Ello has set itself up to be the anti-Facebook and is described by its founder as clear, private and ad-free. This ethos has clearly resonated with people, as the site is currently enjoying an estimated 50,000 sign-ups per hour.
Ello still has long way to go before it can even think about being a competitor to Facebook, but the fact that it has captured the zeitgeist so well shows something could be amiss with Facebook – and most people are pointing to its ad model as the culprit.
On Facebook advertising is cheap, anyone can advertise and there are lots of them.
This model, along with its unrivalled dominance, has resulted in huge profits for the network.
This doesn’t appear to be sustainable however,.
0 as according to some analysts the decline has already started – in the six months to April 2014 Facebook lost 2m UK users.
Whereas Facebook’s approach went for instant gratification, which paid off in a big way, Istagram is going for a much slower, much more cautious approach.
How this evolves and changes will be carefully watched.