Facebook Inc (NASDAQ:FB)’s acquisition of Instagram is starting to pay off. A new report from Ad Age claims the social image sharing app just signed a deal with ad agency Omnicom Group Inc. (NYSE:OMC). The deal was reportedly worth $100 million, but sources close to the matter claim the report it false.
Facebook Inc (NASDAQ:FB) purchased Instagram nearly two years ago for close to $730 million. This prompted many to question the company’s motives behind the big purchase. Instagram remains one of the most popular mobile applications out there. This app makes it easy to take photos, modify them through filters, and instantly share them. Facebook’s purchase was a wise decision. Instagram users produce about 55 million photos a day and 1.2 million likes a day. Instagram had 15 million users when the social giant acquired the app; now Instagram has over 150 million users.
The details behind the deal
The deal lets Omnicom Group Inc. (NYSE:OMC) place ads for their clients on the Instagram application. The ad agency also confirmed the deal. A representative for Instagram, Tim Rathschmidt said, “This is an exciting new chapter and we’re looking forward to the great creative content that comes out of this partnership. Our teams are going to work hand in hand to develop and execute campaigns that provide people with amazing imagery, and drive meaningful business results for advertisers.”
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Rathschmidt added that Omnicom Group Inc. (NYSE:OMC) shares ideals for the Instagram community. The ad agency wants to set the bar high for creative advertisements that really inspire people. He said although it won’t change the company’s advertising strategy, people will still see ads in the form of creative and eye-catching photography.
Instagram previously had advertising deals with high-end fashion designer Michael Kors, denim brand Levi’s, and General Electric Company (NYSE:GE). The fact that Instagram is still going strong and has so many users makes it a huge magnet for advertisers.