It was only a matter of time. Photo-sharing app Instagram has become one of the world’s largest social networks, recently topping 150 million active monthly users. Now the company is developing a plan to introduce ads to turn a profit.
Emily White, Instagram’s director of business operations, told the Wall Street Journal that the company is planning to introduce advertising within the next year. Founder and CEO Kevin Systrom has long emphasized that the social network aims to be profitable on its own one day, but this is the first time executives have set a specific timetable for when that might happen. The mobile-native service, which Facebook bought for more than $700 million last year, has yet to earn a dollar.
Instagram is considering bringing ads to the app’s “Discover” feature, which allows users to browse popular photos, or to its search function, according to the Journal. So far the company hasn’t mentioned placing ads directly into users’ photo streams, which would likely be a much higher-value piece of digital real estate. Both Facebook and Twitter regularly fill users’ personal feeds with marketing. Each began by selling less intrusive ad units first.
Marketers have already flocked to Instagram because it is a visual medium, not unlike magazine and television ads. In interviews many have expressed interest in a paid advertising product. “There are opportunities for brands to be smart, to be contextual, to be a bit native on the platform,” Linda Boff, General Electric’s executive director of global brand marketing, told TIME in April. “We’re very bullish on it.”
Thing is, there’s already an advertising market of sorts on Instagram. Celebrities like Beyonce and Nicole Richie have posted obvious advertisements on their personal accounts in the past. Companies like Mercedes-Benz are recruiting top Instagram photographers to take pictures on behalf of their brand. According to social media analytics company Simply Measured, at least 59 of the world’s top 100 brands are using Instagram right now, pumping out marketing messages on a daily basis. But Instagram has yet to offer a mechanism to let these companies broadcast ads to a wider audience than a specific account’s followers.
There could be a backlash when the site’s ads are unveiled. Much of Instagram’s appeal is as a creative outlet, and users have reacted badly to past attempts to commercialize the platform. In December, users were outraged when Instagram changed its terms of service to allow users’ photos to be used in advertisements. The company quickly dropped the offending language and has been fairly quiet about its advertising plans ever since. But that controversy didn’t put a dent in Instagram’s rapid user growth, a sign that users aren’t so ad-averse as to stop snapping photos.
“Advertising is inevitable because they have to monetize,” says Jean Scheidnes, the social media managing editor for retailer Neiman Marcus. “They just have to tread carefully and make sure that they’re not altering the user experience.”