Facebook talks about Instagram ads

Menlo Park, Calif. – Facebook is preparing a move from Instagram advertising to actual Instagram commerce.



In a call with investors, Facebook COO Sheryl Sandberg said that the social media giant would roll out the ability to purchase items directly from Instagram ads as part of an expansion of Instagram ad formats.



Sandberg did not provide details on exactly how in-Instagram purchases would work or when they might start happening. Facebook paid $1 billion for Instagram in 2012 and started selling ads on the platform in 2014. Banana Republic has reportedly been piloting a feature that links viewers of its Instagram ads directly to a check-out page.



“Over the coming months, Instagram ads will be available to more advertisers with new formats, better targeting and the ability to buy online as well as through third-party planners,” said Sandberg. She added that Instagram is also moving toward linking consumers and purchases.



The announcement of Instagram purchases came as Facebook reported net income of $719 million in the second quarter of fiscal 2015, down 9% from $791 million the same quarter a year earlier but still better than expected. The decrease in profitability was largely due to an 82% increase in expenses such as building data centers, hiring new employees, and long-term research and development projects such as solar-powered drones and virtual reality technology.



Revenue beat Wall Street expectations by rising 39% to $4.04 billion, from $2.91 billion.