Instagram is cranking up its money machine, and that means a lot more ads in your photo feed.
Facebook, which bought Instagram in 2012, has kept the mobile photo-sharing service mostly free of advertising, allowing only a handful of big brands to put a few carefully drafted commercial messages on the service.
But on Tuesday, the company announced plans to open the Instagram feed to all advertisers, from the local tattoo parlor to global food makers, later this year. Marketers will be able to target ads to the service’s 300 million users by interest, age, gender and other factors, just as they can on Facebook.
Instagram will also begin testing a type of ad that allows viewers to click on a link to buy a product or install an app that is advertised.
Instagram offered its first ads in November 2013, but since it has been subsidized by Facebook, it has had time to develop an ad strategy.
The advertising expansion has long been anticipated by marketers and investors, who see big money for Facebook and the brands in ads shown to Instagram’s users — a generally young, passionate group who share, like, click and comment on posts at a much higher rate than users of other services, including Facebook.
One Wall Street firm, RBC Capital Markets, has estimated that Instagram ads could bring in $1.3 billion to $2.1 billion in additional revenue to Facebook this year alone, depending on how quickly its new ad offerings are introduced.
Consumer brands and retailers have been particularly eager for an easy way to lead people who, for instance, like an Instagram photo of a pair of ballet flats, to a place where they could buy the shoes.
Right now, that experience is clumsy, especially on mobile phones, when users are forced to cut and paste a link into their browsers or search for the shoes on a retailer’s site.
“It’s not fun as a user and hard to track as a brand,” said Kfir Gavrieli, chief executive and co-founder of Tieks, a Los Angeles maker of foldable ballet flats that sells its wares entirely online. Mr. Gavrieli, whose company has about 400,000 Instagram followers, was briefed by Facebook on the coming changes and said he was eager to try the company’s new targeting and click-to-buy options.
Nevertheless, increased advertising could also turn off Instagram users. The service’s founder, Kevin Systrom, who still runs the service within Facebook, built it to be a place to relax and appreciate beautiful photos and videos posted by people and companies that users have chosen to follow. When Facebook bought Mr. Systrom’s company for $1 billion, Mark Zuckerberg, Facebook’s chief executive, said he wanted to preserve that experience.
Filling the feed with unexpected ads from random companies could alter that.
“It’s not necessarily going to be the beautiful imagery that fans are used to, ” said Debra Aho Williamson, a principal analyst at eMarketer, who was briefed in advance about the company’s plans. She cited the infamous Facebook ads promoting belly-fat reduction as an example of “ugly” ads that could soon show up in Instagram feeds.
Instagram insists that it is treading carefully to balance the desires of its advertisers and its users and does not want to appreciably change the user experience.
“Visual storytelling for brands has more resonance. People remember it more,” said James Quarles, Instagram’s global head of business and brand development. “But we want to make sure the ads they see are for things that matter to them.”
Collectively, the expanded advertising options signal that Facebook is becoming serious about making money from Instagram, which has a younger audience than the main Facebook social network, whose core users are middle-age mothers.
“Who are brands obsessed with? High-income teens and people in their 20s,” said Scott Galloway, a New York University marketing professor and chairman of L2, a research firm that studies how consumer brands use social media. “Those people are leaving Facebook. Where are they going? Instagram. Facebook has shored up its rear flank with this important cohort with Instagram.”
There is little doubt that Instagram is a powerful storytelling platform for marketers. But so far, most of them have not advertised on the service but instead have used it for more subtle forms of marketing.