Facebook to extend advertising on Instagram beyond US

Instagram, the mobile photo service owned by Facebook Inc, is extending its mobile advertising business beyond the US. It would start displaying ads to users in the UK, Canada and Australia, the company said on Monday.

The ads would start appearing on versions of the service in the three countries later this year, the service said in a post on its official blog.

Reuters reported quoting a Facebook spokesman, Instagram would initially work closely with a handful of advertisers in each country. The social network introduced ads within Instagram in the US in November, working with brands such as Levi's and ice cream company Ben and Jerry's.

According to Instagram, the US ads had in some cases generated results "well above the ad industry's average for performance."

Ads on Instagram, which has over 200 million users, are considered an important source of new revenue for Facebook, which acquired the popular mobile service for $1 billion in 2012.

The company has, however, sought to play down expectations of an immediate revenue boost. Facebook chief operating officer Sheryl Sandberg said in April that the company would take its time rolling out ads on Instagram. She said the company did not see the need or the urge to ramp this as quickly as they possibly could, according to Sandberg.

Ads on other social networks like Facebook and Twitter, which target pitches to users based on their activity and preferences had become commonplace. Instagram had, until recently, chosen not to follow their trail, showing its customers only the content from those they chose to follow. The new ads would target users based on which accounts they followed and which photos and videos they liked, as also interests and ''basic info'' gathered from Facebook profiles.

The service would, however, be taking a calibrated approach inserting only occasional posts from high-profile brands into Canadian streams. The company also planned to use measurement campaigns to track the unavoidable backlash expected from some users.

The Globe and Mail quoted Mark Mahaney, a managing director and analyst at RBC Dominion Securities Inc, as saying there was risk in introducing ads and if it was done too quickly, it could damage engagement. However, he thought Facebook's track record with advertising, along with Instagram's size and rapid growth, were reasons to believe the ads could work.