Instagram will give more powerful tools to businesses hoping to place ads on the popular photo-sharing service, Tech Crunch reported.

After testing and experiments, Instagram has decided to allow businesses to offer "Shop Now," "Install Now" and "Sign-up" buttons, as well as interest and demographic targeting.

Instagram started offering ads in October 2013, and they were more geared toward big brands who wanted Instagram users to remember them. Now, businesses will be able to encourage those on Instagram to download apps or to shop.

Instagram will allow businesses to target users of the service to display them ads based on who they follow on Instagram, and what they "like" on Facebook.

Users of Instagram will see new buttons displayed on some of the pictures they look at. These are called "action-oriented" formats. For example, someone could be looking at a picture from a clothing company of a new shirt being offered. Below the image of the shirt would be a "buy now" button.

Clicking on ads within Instagram will not force users to leave the app. Instead, the ads will be opened in a mini-browser right within the Instagram app. After the user is done with the ad, they will be returned to Instagram.

Instagram wants to keep its users in the app and do not want them going to other apps like Twitter.

"Instagram is not an index or collection of the web where syndicated links matter, it's about photos people take. You're not retweeting, regramming, or passing a link on" Global Head of Business and Brand Development James Quarles said.

"In these cases where there are businesses ... we think that it's a very lightweight experience to go into an in-app browser ... and then come back to the app. We're staying true to the values of simplicity."

Instagram plans to roll out the new advertising formats gradually, first with a test in Spain later this week.

Facebook, the owner of Instagram, has been telling shareholders and Wall Street analysts that it plans to start making money from Instagram, Re/Code reported. This is definitely a great way to do it.