Omnicom strikes $100m Instagram deal

By Rosie Baker | 10 March 2014

Instagram has scored its first major advertising deal with an agency network. Omnicom Group in the US has pledged to invest US$100 million in Instagram advertising for its clients over the course of the year.

The budget is understood to be split across the network including media agencies OMD and PHD and creative shops DDB, BBDO and TBWA/Chiat/Day, according to a report by AdAge.com

Instagram only rolled out its fledgling advertising platform in the US late last year. Brands including Levis, General Electric, and Ben & Jerry were amongst the first to take it up.

In terms of what the $100 million represents, in 2013, US advertisers invested US$4.4 billion in social network ads with Facebook taking the lion's share, according to research firm eMarketer. Social media advertising revenue in the US is expected to grow 31.1% this year to US$5.8 billion in the US.

In a statement to AdAge Jim Squires, director of market operations for Instagram, said: “This doesn't change our advertising strategy moving forward -- people will continue to see a limited number of beautiful, high-quality photos and videos from select brands who already have a strong presence on Instagram."

"Our teams are going to work hand in hand to develop and execute campaigns that provide people with amazing imagery. This is an exciting new chapter and we're looking forward to the great creative content that comes out of this partnership."

Ad buying on Instagram is not handled by programmatic trading, it is manual so that the emphasis is on quality not quantity of ads. Sponsored videos and images feature a logo to differentitate them from unpaid posts. It uses basic Facebook data to target ads.

Instagram is also thought to be in talks with Starcom MediaVest, which is part of the Publicis Groupe, due to merge with Omnicom later this year.

The photo and video sharing platform does not yet offer paid advertising options in Australia but brands are starting to adopt the platform. ANZ recently launched onto the channel.

UPDATE: Further reports from the US have claimed the $100 million figure is high, with AdWeek putting it closer to $40 million and others stating $50 million.

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