After running its first sponsored post four months ago, Facebook-owned Instagram inks its first big ad deal with Omnicom Group.
After running its first sponsored post, an ad for Michael Kors, four months ago, Instagram, the mobile photo-sharing site purchased by Facebook in 2012, now has signed its first major ad deal with Omnicom Group.
Neither Facebook nor Omnicom disclosed financial details of the deal, and estimations vary. Bloomberg first valued the agreement at $50 million, while Ad Age reported that it totaled up to $100 million, followed by Adweek saying that the deal was worth close to $40 million.
Although the actual value of the Instagram-Omnicom partnership is still unknown, one thing is for sure: this one-year agreement will allow Instagram users to see promotional images and videos that are run by brands working with Omnicom's media and creative agencies, including Goodby Silverstein, BBDO, DDB, and TBWA/Chiat/Day.
Meanwhile, the deal enables Instagram to expand its paid advertising model that the site started testing a year ago, because Omnicom will help Instagram develop its targeting and measurement capabilities. Before, brands on Instagram were only able to target their consumers via gender and age, information that was taken from their Facebook profiles.
Instagram is reportedly exploring another big ad deal with Paris-based Publicis Groupe, which will merge with Omnicom Group to form the world's largest advertising holding company.
Of Instagram's 150 million monthly active users, more than 60 percent live outside of the United States, according to January figures from Nitrogram, an Instagram analytics and engagement platform. On Instagram, 16 billion images have been shared, 55 million photos are added every day, and 1.2 billion likes happen daily.
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Yuyu Chen is a junior reporter at ClickZ. Her work has appeared in Local East Village, New York Daily News and Brooklyn Chamber of Commerce website. Yuyu received her M.A. in Business and Economic Reporting from New York University in May, 2013.
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