Instagram Deal Predicted to Boost Facebook Ad Prices

The $1 billion acquisition of Instagram by Facebook last week could lead to higher advertising rates on the social network site, social media experts predict. This year alone, Facebook rates have gone up 41%, and as CEO Mark Zuckerberg prepares to take his company public, ads are likely to become more expensive.

Janet Sternberg, communication and media studies professor at Fordham University, said in an interview with ClickZ Marketing that the acquisition means Facebook will “claim even wider reach and larger audiences for advertisers. Keeping Instagram as a separate system allows Facebook to place ads in two different social media venues, thereby doubling the potential visibility and giving advertisers a ‘two-for-one’ bargain.”

In addition, Facebook ads are poised to become more readily available on mobile phones thanks to Instagram’s popularity on the devices. “By acquiring Instagram’s expertise in mobile data sharing, Facebook also can stay at the leading edge and help drive innovation in the growing field of advertising for mobile devices,” Sternberg said.

Marketers are spending more ad dollars on Facebook than any of the other social media sites. Although prices are going up, there is good news as well: With Instagram, visual advertising will be more prominent, thus attracting more people online. Marketers who previously never considered mobile advertising are now in luck, and can get a two-for-one deal because of the acquisition. Stay tuned for further updates, as Facebook plans to go public next month.

Image courtesy of Flickr, pshab