The social photo sharing app and a Facebook company, Instagram starts to show ads on the photostream of the app for its revenue. Having worked free for almost 3 years, the facebook has finally decided to monetize the app by displaying photos from sponsors on the users’ photo stream bringing the preview period to an end.
The ads have started only for users from US as of now and sooner world wide.The US users will be seeing an ad of Michael Kors watches on their photo stream. The users may click to hide the photo or report it inappropriate if the content is abusive, but they are forced to view the ad even if they are not following the brand or not willing to do so. These ads come with a label that denotes the entry on the feed as a sponsored ad.
The Facebook’s Q3 revenues indicate that 49 percent of its revenues are from mobile platform. So this would be a move with a hope to benefit from the Instagram’s 150 million+ user base. Further Instagram is also ready with a list of sponsors whose ads will be showing soon.This list includes Adidas, Ben & Jerry’s, Burberry, General Electric, Levi’s, Lexus, Macy’s, PayPal, and Starwood.
But the company may be wrong in its decision of showing up ads. The reaction of people for its first ad is negative, not just blaming the company but many comments by users propose to leave the service if this ads continue to be showing up. If this is the scenario, competing companies may have a good time seeing Instagram users move to their apps.
What would be the company’s next step on this scenario? Will the idea of ads be dropped or an alternate revenue model will be used? Let us see.[image][via]