Instagram is, without a shred of doubt, one of the most popular social media platforms today. It works seamlessly with Facebook and gives competition like Snapchat a real run for its money. However, Instagram wants to take the business side of things a step further. Reuters reported that Instagram is now opening up its doors to advertisers. Instagram used to be highly selective about this and only allowed the likes of Victoria's Secret and Old Navy to post ads.

On the advertiser side, Instagram's connection to mother company Facebook is the most attractive part of the deal. It is no secret that Facebook's metadata on its users can boost targeted advertising like no one can. The billions of people who use Facebook, with their different likes and points of interest, these are the people that advertising folks would like to reach out to.

Further analysis also points to a highly successful clickthrough rate on Instagram. Compared to other social media sites, Instagram has two and half times more likelihood that users will click ads. The better the targeting, the more premium the price tag that can be charged to advertisers. Fortune reports that this move by Instagram could make as much as $1 billion in annual revenue for the next few years. Emarketer has already pegged $595 million in ad revenue from this year alone.

There have been a slew of changes happening within Instagram lately. For one, the limit against landscape pictures being uploaded has been lifted. This has been a request from its most loyal users since the very beginning. Its update on ads, however, might not have the expected outcome.

Since Instagram users are quite a selective bunch, the influx of ads from anyone and everyone can easily turn people off. It is more than likely that the clickthrough rate of Instagram was so good because the ads were curated so well too. Time will tell how effective this money-making scheme will do. And yes, Instagrammers will definitely be watching.