Instagram Rolls Out In-Stream Ads As Facebook Seeks to Boost Mobile Revenue

Early Adopters Include Adidas, Ben & Jerry's, Burberry, General Electric, Levi's, Lexus, Macy's, Michael Kors, PayPal and Starwood

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Instagram's cautious roll-out of its in-stream ads is now underway.

U.S. users who open the app in the coming week will see an "educational ad" from Instagram itself, according to a blog post. Confirmed advertisers to follow it are Adidas, Ben & Jerry's, Burberry, General Electric, Levi's, Lexus, Macy's, Michael Kors, PayPal and Starwood, all experienced publishers of organic content on the platform. Ads can be either photos or videos.

A mockup of what a Levi's Instagram ad could look like
A mockup of what a Levi's Instagram ad could look like

As expected, Instagram ads are photos published by the brand's account that will now be shown to people who don't follow that brand. They'll be differentiated with the word "Sponsored" at the top of the image. Users can hide them by tapping a symbol at the bottom of the photo, which "will help us show you more interesting ads in the future," according to the blog post.

If the ads are widely adopted, they could ultimately help Facebook accelerate its fast-growing mobile revenue -- 41% of its total ad revenue in the second quarter -- even more quickly. But Instagram is likely to tread lightly and only make ads available to brands that have endeavored to produce images that fit its sepia-toned, artfully out-of-focus aesthetic in order to minimize the disruption to users. A slow rollout to perfect user experience seems probable.

According to the blog post: "We want ads to be creative and engaging, so we're starting with just a handful of brands that are already great members of the Instagram community."

Instagram is developing an ad model aimed at brand advertisers, not direct response ones. The working concept is for ad quality to be on par with Vogue magazine, according to Debra Williamson, principal analyst at eMarketer.

"There's going to be the usual vocal critics, just like people complained that Facebook was ruined when they started putting ads in the feed," she said. "[But] they're working really hard to make sure the ads are a good fit with the content."

The ads are being sold directly by Instagram's sales team in coordination with their counterparts at Facebook and not through any of the social network's ads API partners, according to a Facebook spokesman. There's also a review process in place for the ads themselves before they're eligible to be served.

The introductory ad to be circulated by Instagram this week is an overhead shot of a man seated at a long wooden table with a smartphone in one hand, a coffee in the other, and a laptop marked with the Instagram logo placed in front of him.

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