The report stating Facebook’s Q1 earnings reveals that the company has managed to make profits from its mobile advertisements. However, during the release of its Q1 earnings, Facebook stated that it has no plans to add advertisements for the popular Instagram app. Though the company is being approached by several advertisers for Instagram, CEO Mark Zuckerberg said that advertising may hinder the growth of the photo-sharing site, reveals Techcrunch. Instagram has been growing rapidly, and much faster than Facebook did at the same age. He added that “big brands” have been approaching Facebook for a more commercialised Instagram experience. According to some reports early last month, several brands were cropping up in sponsored posts on Instagram, but Facebook wasn't earning any revenue from it.
Instagram not yet ready for mobile ads?
Talking about Instagram, Zuckerberg said “They’re really doing well and growing quickly and that is the right focus for them. They have the opportunity to…build community. I am really optimistic about the business and the opportunities.”
Instagram was on the receiving end last year when the photo sharing site updated its terms and services. It had left many analysts wondering how Instagram would get commercialised. However, fearing user ire and lawsuits, the company rolled back to using the older policy. At the time, Instagram co-founder Kevin Systrom had stated, “Going forward, rather than obtain permission from you to introduce possible advertising products we have not yet developed, we are going to take the time to complete our plans, and then come back to our users and explain how we would like for our advertising business to work.”
We’ve seen Facebook focus on mobile advertising lately. It stepped up its efforts last year and has added several improvements to Facebook for mobile. Mobile advertising now amounts to $375 million or 30 percent of the overall advertising revenue generated by Facebook for the first quarter of the year. It also declared a 22.5 percent quarter-over-quarter increase in revenue generated from mobile advertising.
On the other hand, reportedly, several factors have been pointing out that Instagram still lacks the scale required for an effective ad platform by Facebook. It currently has only 100 million users compared to 751 million active Facebook mobile users.