Sources told Bloomberg that Instagram has inked a $50 million advertising agreement with Omnicom Group Inc. The people with knowledge about the matter said the deal with the mobile photo sharing service of Facebook Inc will enable brands working with Omnicom to show promotional material to the users of Instagram. They spoke on the condition of anonymity because the matter is private, the report said.
Commenting on the news, Instagram Director of Market Operations Jim Squires said in a statement, "Omnicom shares our passion for and understanding of the mobile Instagram community. Along with their clients, they'll help to continue to set a high bar for creative work that inspires people." However, he did not disclose how much the deal was worth, the report said.
Facebook purchased Instagram in 2012 in a deal worth over $700 million. Facebook Chief Executive Officer Mark Zuckerberg has been trying to increase the revenues it gets from mobile users since this segment now comprise over half of the revenues that advertising generates. The deal is said to be part of Zuckerberg's push to tap into this segment. This is only the fifth month since Instagram's launched its advertising platform with brands like Ben & Jerry's and Lexus. The social media's newest acquisition, WhatsApp, on the other hand, does not advertise but earns subscription revenue from users of its messaging service, the report said.
Squires added that the deal with Omnicom will not affect the advertising approach of the photo sharing site. A "limited number of beautiful, high-quality photos and videos from select brands who already have a strong presence on Instagram" will still continue to be shown on the platform. Omnicom is an advertising firm that has a worldwide presence. Some of the businesses in its global portfolio are BBDO Worldwide, TBWA Worldwide and DDB Worldwide Communications Group, the report said.
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