The new ad product will show full-screen ads in intervals as users swipe through photos and videos on their Instagram Stories dash.
With its new ad product, Instagram is riding the success of Stories, which launched in August. When the app auto-advances from the end of one friend's story to the start of another's, Instagram will sometimes slip in an ad with a "Sponsored" label on it.
Instagram Stories now has as many users as the last number announced by Snapchat, the app Instagram copied. A global leader in accommodation, Airbnb has been constantly using Instagram stories features in marketing and creating awareness.
The ads will be available through the Facebook-owned site's self-serve ad platform, where Instagram also has 500,000 existing advertisers. Instagram sees the ad-hoc, instant native of Stories as complimentary to the in-feed posts, but it will evolve.
This feature in combination with Facebook's measurement tools will be able to give brands a much thorough picture of businesses around the world - something Snapchat lacks. Users can post photo and video slideshows that disappear after a 24-hour period, a shamelessly similar concept to Snapchat Stories.
As Instagram's revenue rises, it comprises a larger share of Facebook's ad business. However, if the company is able to successfully launch this feature and simultaneously increase video consumption on its platform, it can accelerate advertising revenue growth for the company.
The Instagram ads will be a tad bit different from Facebook's in that they will be playing audio automatically.
"We're excited to see how brands think about integrated storytelling to get their message in front of people", Shah said.
On Monday, Facebook sent a note to advertisers that they would start seeing the option to serve their ads into live and "formerly live" videos.
He said that a third of the Stories that were viewed already came from business accounts.