Instagram could generate as much as $US595 million in worldwide advertising revenues this year, according to research house eMarketer’s first ever advertising forecast for the Facebook-owned photo sharing and editing app.
The company’s recent moves to expand its ad offering — opening up a self-service way for brands to buy ads through an API, extending Facebook’s ad targeting tools to Instagram advertisers, and expanding the type of ads it sells to include direct response ads — will even see Instagram surpassing Google and Twitter in terms of US mobile display ad revenues by 2017, eMarketer predicts.
In just two years, Instagram’s global mobile ad revenues (it doesn’t have a desktop ad product) will hit $US2.81 billion — 10% of Facebook’s estimated global ad revenues that year.
This year, Instagram revenues will account for 3.7% of Facebook’s total ad revenues. That figure will climb to $US1.48 billion, or 7.1% of Facebook’s total ad revenues, by 2016.
Debra Aho Williamson, eMarketer’s principal analyst, says: “Now that Instagram is opening up, there is a lot of pent-up demand. The rollout of new features over the next several months means that by the end of 2015, Instagram will have a host of new ad products for advertisers large and small.
In particular, Instagram advertisers will be able to use a full slate of Facebook targeting tools, including the popular Custom Audiences feature. That will be a key drawing card.”
The overwhelming majority (95%) of Instagram’s ad dollars are made in the US, according to eMarketer. The US is also where the app has its biggest userbase: 64.2 million people in the country use Instagram, and eMarketer predicts that number will rise to 111.6 million by 2019.
Instagram claims to have 300 million monthly active users. Earlier this month the company revealed it has 14 million users in the UK.
EMarketer forecasts are based on analysis of quantitative and qualitative data from a number of different research firms, government agencies, company reports, and media. It weights each report based on “methodology and soundness.”