Following Emily White's appointment to the position of Director of Business Operations in April 2013, she stated in an interview with The Wall Street Journal in September 2013 that the company should be ready to begin selling advertising by September 2014 as a way to generate business from a popular entity that had not yet created profit for its parent company.  White left Instagram, however, in December 2013, to join Snapchat  In August 2014, James Quarles was hired as Instagram's Global Head of Business and Brand Development, a new position within the company focused on overseeing advertisement and sales efforts while developing new "monetization products", according to a spokesperson.

In October 2013, Instagram began its monetization efforts, announcing that, "over the next couple of months", video and image ads would start appearing in between users' photos in the news feed for users in the United States.  A sample ad from Instagram, featuring the text "Sponsored" at the top right of the image, was the first to be released, with a limited number of brands being allowed to advertise in the early stages.  Image advertisements officially started appearing in feeds starting November 1, 2013,  followed by video ads on October 30, 2014.  In June 2014, Instagram announced the then-upcoming rollout of ads in the United Kingdom, Canada and Australia, planned for "later this year"  The same sample ad from Instagram's launch in the U.S. was shown to users in the United Kingdom in September 2014, with ads rolling out "over the coming weeks".

In March 2015, it announced that it would allow advertisers to buy "carousel ads", a way for brands to upload up to five images that users can swipe through, with options at the end for additional content or a visit to the brand's website.  Following strong performance of the ad format, Instagram opened up a self-service feature for brands to buy carousel ads the following October,  and in March 2016, it started allowing video in carousel ads.

In May 2016, Instagram announced the launch of new tools for business accounts, including new business profiles, Insights analytics and the ability to turn posts into ads directly from the Instagram app itself. However, to be eligible for the tools, businesses had to have a Facebook Page, with Quarles stating: "In doing that, it gives us the payment credentials, as well as if they want to prepopulate some of the information like their street address, the phone number, and the website".   The Instagram Insights panel, which lets businesses see their top posts, reach, impressions and engagement surrounding their posts as well as user demographics,   was rolled out first to the United States, Australia, and New Zealand, with the rest of the world "by the end of the year".
In February 2016, Instagram announced that it had 200,000 advertisers on the platform. This increased to 500,000 active advertisers in September 2016, and one million in March 2017

Stand-alone apps

Instagram has developed and released three stand-alone apps with specialized functionality. In July 2014, it released Bolt, a messaging app where users click on a friend's profile photo to quickly send an image, with the content disappearing after being seen.  It was followed by the release of Hyperlapse in August, a then-iOS-exclusive app that uses "clever algorithm processing" to create tracking shots and fast time-lapse videos.  Hyperlapse launched on Android and Windows in May 2015. In October 2015, it released Boomerang, a video app that combines photos into short, one-second videos that play back-and-forth in a loop.