The Instagram stories was one of the controversial feature that was added to the social media platforms few months ago and it has really gained tremendous popularity over that short period of time. Due to that reason, Instagram has decided to monetize it.

Instagram is now displaying advertisement on Instagram stories, pictures and short videos that appears on Instagram for 24 hours. The ads will display at the top of every feed and it will make it possible for users to reach third party advertisers directly.
Aside that, there are also full screen ads which displays in between every users story.

According to Instagram,

"150M people are making use of this feature per day, the same as Snapchat’s daily users".

Also in a bid to make it easy for users to differentiate between ads and main videos, Instagram will mark video ads as "sponsored".

According to an official statement by Instagram's VP of business, James Quarles,

"Adverts are designed for “reach” rather than immediately to drive sales and will not have links to websites."