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The first Instagram ad has finally arrived

The ad, from designer Michael Kors, began appearing on Friday and drew the ire of some Instagrammers

Technology trends and news by Steven Loeb
November 2, 2013 | Comments
Short URL: http://vator.tv/n/32f4

They're here!

A little over a week after giving us the first preview of what they would look like, the first Instagram ad has finally arrived. And people are not happy.

The ad in question is from fashion designer Michael Kors. It is a picture of a gold watch, on a table, with some macarons next to it. The picture has begun appearing in the feed of users who do not follow the Michael Kors account.

For those who do not follow the account, they will see the picture with a big blue "sponsored" label in place of the time stamp. However if you view the picture directly on Kor's page, it will appear as any other image would, without the " "sponsored" label.

Here is the picture as it appears on Kor's feed:

The picture has over 227,000 likes, but the fact that people who have no interest in this type of thing are now being forced to briefly look at it is causing some ire among Instagrammers.

Here are a few of the comments that people have left on the photo:

"I don't care about Michael kors."

"Get this off if my feed. Ads suck"

"Get Tf off my TL !!!"

And simply: "No"

But, as much as people might dislike it, ads on Instagram are not going anywhere. They are just too valuable to Facebook for them to pass up.

Advertising is key to social media companies that want to become real moneymakers. That is especially true for Facebook, which makes the vast majority of its money from that sector.

In its latest quarterly earnings report, Facebook's advertising revenue was $1.80 billion, an increase of 66% year to year.

And that number will no doubt go even higher by the end of this year. 

Facebook's ad revenue for 2013 is set to see its mobile ad revenue shoot up over 333%, from $470 million to 2.04 billion, according to a report from eMarketer released in June.

Want to be even more impressed by how well Facebook is going to do in 2013? In 2011, the company's mobile ad revenue was zero. The company went from making zero dollars to over $3 billion in two years.

So putting ads on Instagram, with its 150 million monthly users, is key to Facebook's growth. And it is already causing at least one analyst to raise his price targets for Facebook

How much will these ads be able to net? Quite a lot, potentially. Sterne Agee Analyst Arvind Bhatia believes that number to be close to a billion dollars in just a few years.

"Net, we estimate that Instagram could generate $800 million in revenue in the next three to four years. We note that Twitter, with roughly 50 million MAUs in the U.S., is on a run-rate to generate $350 million to $400 million in the U.S. this year."

These numbers are a step up from last year, when Bhatia predicted that it would makes between $500 and $700 million in the same amount of time. 

(Image source: http://instagram.com)

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