Chirpify, not Facebook, swoops in to help brands sell on Instagram

Facebook hasn’t made a dime from photo-famous Instagram, but that hasn’t stopped others from capitalizing on the attention of more than 100 million photo-sharers. Now, startup Chirpify has masterminded an ingenious system to do what Facebook can’t: help people and brands sell to their fans on Instagram, and pocket a piece of the action in the process.

Founded in 2011, Chirpify makes a commerce platform that turns tweets, and now Instagram photos, into social moments ripe for transactions. The young, Portland-based company has raised $1.3 million in seed funding and counts as customers a small but noteworthy base of in-stream sellers such as Taco Bell and Green Day.

Tuesday, Chirpify upgraded its service to support Instagram transactions, meaning consumers and businesses can now buy, sell, donate, or exchange funds from directly within Instagram applications.

Chirpify sellers, after first creating an account with the company, need only post a photo to Instagram and include a comment with “#InstaSale” and the dollar amount to initiate a sale. The status update is automatically transformed into a listing. Photo viewers can then respond with “buy” in the Instagram comment section to purchase the item in question. Chirpify, meanwhile, takes a 5 percent cut of transactions, charging the fee to sellers each time they make a sale.

Chirpify estimates that 40 percent of the world’s most popular brands are on Instagram, which would make Instagram commerce a potentially lucrative opportunity. The startup said Bogs Footwear, Fearless Records, tattoo artist Kat Von D, and others plan to launch Chirpify-powered Instagram campaigns in the coming days.

So how, exactly, does Facebook feel about Chirpify’s money-making schemes for its expensively acquired photo-sharing property? We don’t know, as Facebook declined to comment, but Instagram creator Kevin Systrom said in a recent interview that he wants to encourage development of products that he has no intention of building.

“I’m excited about the fact that people are making money off of Instagram in interesting ways like printing canvases or postcards,” Systrom said. “I think there’s value in that, and that’s just not a core competency that we’re going to build or that we care about right now.”

Whether that open-minded policy extends to in-stream commerce plays such as Chirpify, however, is uncertain.

As the secondary market for profiting by Instagram expands, Facebook seems to have finally wised up to how to make money from its own mobile applications. The social network said Tuesday that it made 14 percent of its advertising revenue, or roughly $152.6 million, from mobile during the third quarter of 2012.