Rumors are swirling about that Instagram has just signed a massive advertising deal with the ad agency Omnicon Media to the tune of $100 million. This is supposedly a guaranteed ad buy from the agency who will then sell those ads to various advertisers looking to advertise on Instagram. The terms of the deal and the duration of the deal are still to be made public, but according to Ad Age Facebook has confirmed their relationship with Omnicon but hasn’t given any details.

Ad Age claims that the image (below) is a Michael Kors advertisement for Instagram, even though it is seemingly no different from the other posts on Michael Kors’ Instagram page. 

The biggest problem that Instagram faces is being able to integrate their ads into their existing platform and userbase without alienating them. The easiest way for them to do this is to follow Twitter’s promoted tweet approach which is the least intrusive compared to Facebook’s ad boxes and promoted timeline posts. Plus, it will be much harder to block their ads in-app unlike Facbeook’s webapp which is easily blocked by adblockers.

Hopefully this will help Facebook move towards paying off that $1 billion purchase price that they paid for Instagram and finally start monetizing on that business. A lot of people are slowly moving away from Facebook or never getting one, which is clearly a problem Facebook recognizes and that they are looking to address by purchasing Instagram and other potential competitors to Facebook. I think advertising on Instagram can work if they make sure that the ads are relevant and not overly intrusive or overly frequent.