Facebook-owned Instagram is reportedly investing in its e-commerce business, Instagram Shops, with the launch of a new advertising product -- Ads in Instagram Shop.
The company said it is currently testing the new format, which includes both single images and the option for an image carousel, with select US-based advertisers ahead of an expansion to other markets in the months to come, TechCrunch reported on Monday.
The company first introduced Instagram Shops last year as part of a larger effort at Facebook to make its social platforms not just a place to connect with friends and follow favourite brands, but also an online shopping destination with an integrated checkout experience.
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The report said that this type of initiative also lends itself to Facebook's advertising model, as brands looking to connect with consumers could pay for expanded reach.
Like Instagram's other advertising products, Ads in Instagram Shop will launch with an auction-based model, the company said.
The ads will only appear on mobile, as the Instagram Shop tab is a mobile-only feature. However, how many ads an individual consumer sees will be based on how they use Instagram and how many people are shopping in the Instagram tab.
According to the report, the company plans to monitor consumer sentiment on this point, in order to balance ads and content.
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Initially, Instagram is working with a handful of US advertisers who will test the product and provide feedback, including Away, Donny Davy, Boo Oh, Clare paint, JNJ Gifts, DEUX and Fenty Beauty. These brands encompass some of the more popular categories of goods Instagram users like to shop for, including beauty, home decor, pet products, travel and more.
The company has not yet disclosed an exact time frame for rolling out the ads more publicly, but said the plan is to expand the new format to advertisers in other, non-US markets over the next several months.
