The deal between Instagram and Omnicom is reportedly worth $40 million. This is a smaller amount compared to other reports that it was worth a hundred.
According to sources of Adweek, this new estimate of the deal involves a volume inventory and other factors like Instagram's ongoing promos. Other reports estimated the deal to be between $50 million up to $100 million.
Omnicom Group is a leading global advertising agency and one of the "Big Four" in the ad industry. It works with more than 5,000 clients from 100 countries including Pepsi, Nissan, AT&T, and Bud Light. The deal with Instagram is seen as an effort to tap the potential that the social media platform could offer.
According to Adweek, those who are privy to the deal's details described the deal as not "your typical agency deal". Instagram will be monitoring the ads and will regulate the types of brands which will be shown to their network. The site has turned down other ad agencies and will work closely with Omnicom to create content which will be welcomed by Instagram's community.
"Omnicom shares our passion for and understanding of the mobile Instagram community," Instagram's director of market operations, Jim Squires said in an email to Adweek. "Along with their clients, they'll help to continue to set a high bar for creative work that inspires people."
Instagram, which was acquired by Facebook for $1 billion, will soon display ads, about the same time that Facebook will launch its auto-play advertisements. In November 2013, Instagram showed its first ad feature Michael Kors and Ben & Jerry's.
The deal between Instagram and Omnicom is expected to be profitable for both sides. However, Instagram assured that the ads will have minimal effect on the site's user experience.
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