We Finally Know How Instagram is Going to Earn Some Money

Given its popularity, one might think that Instagram was earning millions of dollars through its followers. But what sort of an app will earn money if its only function is uploading or liking pictures? It barely earned a penny. Then, in 2012, it got a push because Facebook bought it for a billion dollars. However, the income was still meagre. Now in 2015, this is why it’s going to change:

Instagram will finally allow a fully operational Ad business, providing shopping links with their posts, aided by Facebook targeted groups. Yes, this means that Instagram, will now have a ‘Shop Now’ button that will link you to what you want to buy.

Earlier, Instagram had 475 campaigns with huge companies like Gap, Disney and other retailers, however, they wouldn’t provide links to buy the product outside the app and these companies would have to collaborate with third party services. Now though, we will be able to see purchase details of all commodities below the pictures and videos a company posts, and we’ll even be directed to the site of purchase.

Instagram plans to use Facebook’s 2 million advertisers to facilitate this new feature and it is certain that companies too, are ecstatic about the new development.

“It’s an ideal platform to shop on as it’s so visual and fashion oriented,” said Old Navy media director Michele Schuh in an email to Adweek.

While it will be very convenient to find the cost of a Michael Kors bag or the price of GAP t-shirts, below the picture, it will also mean that the number of ads is bound to increase. And we know how annoying that can be.

Instagram is not too worried about losing its followers, though. It is said that they have a new API in place that will allow marketing partners to automate ad responses. This means that advertisers can reach all age groups on Facebook and target their interests as well. In addition to this, they are working on making each ad fit seamlessly into your feed so that it causes minimum disturbance while you’re scrolling through your friends’ posts. So we can expect that there will be no pop-ups in the near future, at least.

This spells good news for retailers and Instagram as they will see their fortunes rising. However, we don’t know if this is a positive or negative development for its users.

What do you think? Feel free to leave a comment below.