Instagram Signs Year-Long, $100M Deal With Omnicon In Its First Ad Deal


Instagram has signed a $100 million year-long deal with Omnicon Media Group (NYSE:OMC), a global advertising agency, AdAge reported on Friday. The agreement marks the company’s first major ad deal, and has some whispering about whether Facebook Inc. (NASDAQ:FB) might finally start to make some money off the company it paid $715 million for two years ago.

Instagram first announced that it would be debuting advertising on the social media platform in October of last year. The company then began testing ads in early November, debuting with ads from brands like Michael Kors, Levi’s, Burberry, Lexus, General Electric, and Ben & Jerry’s.

“This is an exciting new chapter and we’re looking forward to the great creative content that comes out of this partnership,” a Facebook representative said, per Mashable. “Omnicon shares our passion for and understanding of the mobile Instagram community. Along with their clients, they’ll help to continue to set a high bar for creative work that inspires people,” he added.

Facebook has stated that even though Instagram has officially signed a partnership with Omnicon, users shouldn’t expect a huge swath of new ads appearing on their photo streams. Facebook and Omnicon are working with a “very limited number of long-term partners,” the two companies said in a statement, per AdAge.

“This doesn’t change our advertising strategy moving forward — people will continue to see a limited number of beautiful, high-quality photos and videos from select brands who already have a strong presence on Instagram,” said Jill Squires, Instagram’s director of market operations. “Our teams are going to work hand in hand to develop and execute campaigns that provide people with amazing imagery. This is an exciting new chapter and we’re looking forward to the great creative content that comes out of this partnership,” per AdAge.

The ads, which premiere on Instagram, will be controlled so that they stay on a user’s photo stream for “an extended period of time,” AdAge says. The ads are meant to be high-quality, so rather than tons of content, Instagram plans to be very selective: ad buys will be manual, rather than being bought and served programmatically.

“This is another example of the media becoming the message,” said Daryl Simm, CEO of Omnicon Media Group. “It’s a high-quality engagement with the consumer as opposed to a quick hit, it’s that conjecture that’s so appealing to us.”

Instagram currently boasts 150 million active users, with more than 60 percent from outside the U.S. The company says that roughly 55 million photos are posted on the platform daily.

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