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In-app ads are big business- how will Instagram fare?

It was only a matter of time before Instagram announced it would be showing in-feed and image advertising to its users. Naturally, we at The Practice were keen to explore the issue, and so today we’re asking: Will Instagram display ads be disruptive to the user experience? And how does the state of social media advertising look at the moment?

Instagram announced on its blog that ads will start appearing over the next couple of months, starting with its US users, and even from brands you don’t follow. While arguably its owner, Facebook, features adverts that seem intrusive on our News Feed, Instagram states that their ad displays will hopefully be as seamless as possible. In fact, according to their blog post announcement, the adverts will be made to feel “as natural to Instagram as the photos and videos many of you already enjoy”, including enabling users to hide ads they don’t want to see. However, we’re not convinced, largely in part to the fact that Instagram’s feed features a single channel of images or videos with no room for adverts to appear in any side-streams. We’re not sure as of yet how Instagram will be able to present adverts unobtrusively without compromising our experience. Already, we’re not too keen with how promotional messages are interspersed with status updates, images and links on our Facebook mobile app, for instance- so the question is, what will Instagram do differently?

If we consider the wider picture of mobile advertising on our social media apps, the forecast for this year is already hugely promising, with projected spend expected to reach $8.8 billion, according to eMarketer. Just recently, Facebook announced expansion of its mobile app advertising to enable developers to separately target users in News Feed. This will see them able to place specific actions on the mobile app such as “Shop Now”, “Open Link”, or “Watch video” to help a brand enhance its mobile marketing campaign. Aside from this, Facebook has also been testing the changing ways promotions and marketing messages will appear in News Feed on its mobile app, to increase, (according to Mark Zuckerberg), “targeting and relevancy.” Not only this, but the company also recently bought Israeli Startup, Onavo, to help boost mobile advertising potential. With these advancements under Facebook’s belt, it’s expected that the site’s share of global mobile ad revenue is already expected to rise to 15.8% from last year’s figure of 5.35%.

Similarly, Twitter is also reportedly seeking increased revenue from its mobile advertising endeavours, with claims that it is developing an ad network for apps and websites that will target visitors based on what users tweet and who they follow. These reports emerge after the site’s recent acquisition of mobile ad exchange platform, MoPub, a startup that helps mobile publishers manage their ad inventory. If this is the case, we predict that this will be a positive move for Twitter; already from last year, the company generated more revenue from adverts on its mobile app, than on desktop- something the company puts down to being able to “easily convert any tweet into an ad.” It’s clear that advertised tweets seem to work well- (The Practice team for one generate a high click-through rate!) But ultimately when the subject rolls back to Instagram; how will it compare as an image-only app when it starts to roll out adverts? We’ll have to wait and see…

Do you feel that advertising on your favourite social media channels disturbs your experience? And do you think Instagram will stand to gain from increased revenue, or lose users as a result? We’d love to hear your thoughts as always, so please tweet to us @PracticeDigital and share your comments on our Facebook page.