In just two short years, Instagram’s global mobile ad revenues will reach US$2.81 billion, accounting for over 10 percent of parent company Facebook’s global ad revenues.
Instagram will bring in US$595 million in mobile ad revenues worldwide this year, according to eMarketer’s new report, Instagram Advertising: What Marketers Need to Know, that features forecasts, plus analysis of Instagram’s user base and its new ad products.
Driven by a high demand for the social network’s new ad products, which will expand beyond branding to include direct response, the ability to buy ads via an API, and enhanced measurement and targeting features, Instagram’s ad revenues are expected to undergo rapid growth both this year and throughout the forecasted period.
Since then, the platform has experienced high levels of brand engagement, coupled with a solidly growing user base and new ad offerings, resulting in positive mobile ad revenue, with forecasts of a higher net mobile display ad revenues than both Google and Twitter in 2017. Last year, Instagram surpassed Twitter to become the second-largest social network in the US.
“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,” said Debra Aho Williamson, eMarketer principal analyst.
Instagram’s ad revenues will make up five percent of Facebook’s mobile ad revenues this year, and that share will increase to 14 percent in 2017, eMarketer forecasts. In the US, respective figures will come in at 10.7 percent and 28 percent in 2017.
Throughout the three-year forecast period, Instagram will make the vast majority of its ad dollars in the US, though non-US revenues will comprise a growing share of the pie. eMarketer forecasts that Instagram will have just US$30 million in ad revenues outside the US this year, or five percent of the total. Meanwhile, the US will account for 92 percent of the total in 2016 and 85 percent in 2017.
Instagram’s monthly US user base increased nearly 60 percent in 2014 to 64.2 million people, eMarketer estimates. By 2019, over one-third of the country’s population is expected to use the social network, amounting to 111.6 million consumers.
Internationally, Instagram’s growth hasn’t been as strong, and other mobile social apps will continue to challenge it. As of July this year, Instagram advertising is available in only seven international markets: Australia, Brazil, Canada, France, Germany, Japan and the UK.