Instagram to debut ads next week

The Facebook-owned property hopes to ease member concerns around ads with a sample sponsored message it will promote in the week ahead.

(Credit: Instagram)

Instagram said Thursday it will start showing photo and video ads to users in the U.S. as soon as next week.

The company released a sample ad on Thursday to prepare its 150 million active users for the coming-soon sponsored messages. The example photo ad, pictured above, will be the very first ad users see, and it will be distributed to members in the feed in the 'coming week,' Instagram said.

'You'll know a photo or video is an advertisement when you see the 'Sponsored' label where the time stamp normally would be,' Instagram wrote on its blog. The service said that members can tap the label to get information on how its advertising works. People can also click on '...' at the bottom of an ad to hide the ad and provide feedback.

To start, Instagram advertisers will include Adidas, Ben & Jerry's, Burberry, General Electric, Levi's, Lexus, Macy's, Michael Kors, PayPal, and Starwood, an Instagram spokesperson said.

On the ads about page, Instagram noted that it will use information on what members do on Instagram and Facebook to show ads from businesses that the service deems potentially 'interesting.' 'For instance, this might include the people you follow and the photos and videos you like on Instagram, and your interests and other basic info on Facebook,' Instagram said.

In early October, Facebook-owned Instagram first warned members that ads were coming soon. At the time, the app's makers promised that the brand-sponsored photo and video updates would be magazine-quality and be a 'natural' part of the Instagram feed.

Though users will surely be wary of ads infiltrating their previously pristine feed, Altimeter Group digital advertising and media analyst Rebecca Lieb believes that Instagram is doing everything it can to make sure the units are received well. 'Their approach to monetizing the platform is so careful you could almost characterize it as curatorial,' she wrote in a blog post.

Like them or not, the Instagram ads will help Facebook profit for the first time from the 3-year-old application it purchased for $1 billion last year.

Investors have been keen on the prospect of Instagram ads because they bring with them the promise of additional revenue from a highly engaged mobile audience. The units should also help Facebook maintain its lead in the mobile display advertising category.

Facebook, according to eMarketer, is expected to take home a 33.3 percent chunck of US mobile display ad revenues in 2013. The firm anticipates that mobile display ad spending in the US will grow 106.1 percent to $3.8 billion this year, up from $1.8 billion last year.