The Arrival Of Ads On Instagram Sets Up A Huge Mobile Video Fight With Twitter And Vine

Yesterday, while everyone in tech was obsessing over Twitter's imminent IPO filing, Instagram CEO Kevin Systrom approved this post on the company blog that says yes, indeed, ads will arrive on Instagram:

Seeing photos and videos from brands you don't follow will be new, so we'll start slow. We'll focus on delivering a small number of beautiful, high-quality photos and videos from a handful of brands that are already great members of the Instagram community.

The move is a natural one, following the 15-second video feature that Instagram added a few weeks back. 15 seconds is a standard advertising unit in TV-land.

The blog also noted that Instagram's user base has grown to 150 million.

That, of course invites comparisons to Twitter's 218 million user base, as described in its IPO. Twitter's video product, Vine, will remain ad-free for now, the company said in its IPO. (Although plenty of brands are using it for free to seed viral content.)

So what we have here is a straight choice for advertisers who want creative mobile video ads that users can share and engage with. In one corner is Facebook-owned Instagram, with its 150 million users and its ability to pay to make sure an entire targeted audience sees the ad. In the other, Twitter's 218 million (within which are Vine's 40 million users).

Twitter is no doubt hoping that the ad-free Vine environment will attract early adopters who want the "pure" experience of mobile video sharing, before the "sell out" period. Twitter needs to grow its audience after all.

Facebook, on the other hand, is arguably a few steps ahead here: It's already talking about 100 million-strong audiences during prime time, and how Facebook's audience is the equivalent of three Super Bowls every day. It has reportedly been asking for $2.5 million for the first video ads on Facebook proper.

The Instagram move in some ways spoils Twitter's IPO party. The company has proudly released its financials, and revealed a robust and growing business (albeit with some teething problems).

But it turns out that Twitter is comparable in size more to Instagram than Facebook, its arch-rival. So Facebook's announcement yesterday kinda looks like it's saying, "Hey, nice IPO, Twitter. Now look over here if you want to do some serious mobile video business."

Disclosure: The author owns Facebook stock.