Facebook's drive to monetize its massive user base has caused Instagram's first major backlash. Upset with changes to Instagram's terms of service which would allow the company to leverage user data and content in ads, vocal Instagrammers rose up and said "That's not cool!"
While it remains to be seen whether this Instagram backlash has a short half-life, things could get worse for the world's largest social network next year if it rolls out News Feed video ads.
According to AdAge, Facebook is in the final stages of developing an ad offering that will insert 15 second video ads into user News Feeds on the Facebook website and in the service's mobile apps. What's more: those video ads will play automatically, although it isn't yet clear whether sound will be enabled by default or not.
A risky proposition
Facebook's interest in video ads shouldn't come as a surprise. After all, while YouTube may be the 800 pound gorilla of video content on the social web, Facebook is the second most popular video destination on the web. But instead of focusing on something basic, like adding pre-roll ads to user-uploaded videos, Facebook is apparently planning to go all-in on the native advertising trend that has is sweeping the industry.
The good news: there's almost certainly money in the combination of native, social and video. The bad news: Facebook's News Feed video ad offering, as described, would arguably be the most invasive advertising the social network has injected into the Facebook experience.
The risk, obviously, is that users revolt. Although a full retreat from Facebook seems unlikely, the company must be careful about the impact of new ad offerings on user behavior. If ads -- particularly native ads that directly impact the core social networking experience -- push users to use Facebook less, or to use it differently than they do now, it could be bad news for Facebook.
And it could be bad news for Facebook advertisers. Many have demanded bigger and bolder ads, and while Facebook may finally be willing to oblige them, the risk for advertisers is that their hunger for Facebook eyeballs will eventually maim, if not kill, the goose that laid the golden egg.