Instagram adds longer video ads, other marketing tools in push to draw advertising revenue

Instagram users have already been seeing more advertisements pop up in their feeds of artisanal cocktails, wide-eyed kittens and vacation photos, and now they can expect longer video ads in the mix too.

The Facebook-owned photo-sharing app is adding 30-second video ads and other features in a push to give businesses more ways to tap the 300 million people who use it at least once a month. Previously, ads on Instagram were 15 seconds long.

Instagram said in a blog post that large and small advertisers will be able to run campaigns on Instagram starting this month, and ads are now available in more than 30 new countries, including India, South Korea and Mexico. More than 70 per cent of Instagram’s users are outside of the U.S.

Aside from video ads, businesses will also be able to use landscape-style photos, as well as a product called Marquee that aims to quickly expand a company’s reach in a short time frame for things like movie premieres and product launches. Long known for its square pictures, Instagram recently started letting users post photos in rectangle shapes.

The company said businesses have been testing the app’s new tools over the summer, and Instagram is seeing “significant” demand in areas like e-commerce, travel and entertainment.

Instagram is already an established marketing tool for small businesses like restaurants, bakeries and hair salons that sell items that photograph well. The app was founded in 2010 and bought by Facebook two years later.

Its expansion comes as Instagram parent Facebook focuses more on drawing advertising revenue from where its users are, on smartphones and other hand-held devices. The world’s largest online social network drew 76 per cent of its total advertising revenue in the second quarter from mobile advertising, up from 62 per cent a year earlier.

Research firm eMarketer estimates that Instagram’s worldwide ad revenue will be $600 million this year. By 2016, it’s expected to reach $1.48 billion, rising to $2.81 billion in 2017.

Shares of Menlo Park, California-based Facebook Inc. rose $1.89, or 2.1 per cent, to $91.42 in midday trading. It is up about 17 per cent year to date.


AP Business Writer Tom Murphy contributed to this story from Indianapolis.