Instagram Stories: Ads Are Coming

Jan 12, 2017 07:00 AM EST | Jeroah Sabado

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On Wednesday, the Facebook-owned company announced the testing of video and photo ads in Stories with more than 30 advertisers, including Capital One, Netflix, Nike, GM's Buick, Maybelline New York and, Airbnb. The ads will appear between Instagram Stories user content.

Advertisers are now able to turn an existing Instagram Story into a paid ad or insert static images in it. Instagram said the video ads will auto-play in full screen in which users will be able to skip after 15 seconds in length by tapping on it.

Unlike its parent company's video ads, Instagram ads will play automatically with sounds. The ad style is similar to the format Snapchat has been offering since summer 2016 which also lets advertisers insert ads in between user content in order to create a more organic viewing experience.

Instagram said in December that it reached 600 million monthly active users and about 150 million daily users now interact with Stories compared to 100 million last October. The company also claims that more than 70% of its users uses the service for businesses, and one-third of the most-viewed stories are from businesses as well.

In terms of business potential and user experience, it is a fact that Instagram Stories is created to compete with the likes of Snapchat. But the main advantage Instagram has over Snapchat is that, advertisers are able to leverage years of user-data collected through Facebook.

Since this offering gets the benefit of Facebook's measurement tools and gets precious information about a user's interests and demographic, Instagram said it will work with third parties, including Kantar Millward Brown and Nielsen, to verify the data they give to its advertisers.

Right now, the ads will not yet appear within the user's content in Instagram Stories. Instagram confirms it will start testing the ads before this month ends.

Instagram is a mobile photo-sharing site which allows users to take photos and share through the app. Facebook acquired Instagram for $1 billion in cash and stocks on April 12, 2012.

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