According to a new report from eMarketer, Instagram is on course to make $2.81bn in mobile ad revenue by 2017, up from $595m this year, representing 10.6% of total US Facebook ad revenue. Recent changes to its ad offers and growing demand for its products, such as buying ads through an API, are predicted to catapult the company ahead of Google and Twitter in terms of mobile display ad revenue.
Instagram is forecast to increase ad revenues to $2.81bn
The Instagram Advertising: What Marketers Need to Know report, shows that overall net mobile ad revenue of Instagram represents 5% of Facebook’s total mobile ad revenue worldwide this year, projected to almost triple to 14% in 2017. The vast majority of Instagram’s ad revenue will come from the US, accounting for 92.0% of the total in 2016 and 85.0% in 2017.
Instagram mobile ad revenue makes up 5% of Facebook’s total mobile revenue worldwide
Debra Aho Williamson, principal analyst, eMarketer, finds:
“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.”
eMarketer estimates that the imaging app’s US user base grew almost 60% in 2014, expected to rise to one-third of the country’s population by 2019. However, Instagram’s growth in revenue only relates to mobile display. Overall, Google will remain ahead of Instagram due to its mobile search income.
Google, Twitter and Instagram mobile ad revenues compared
It remains to be seen if Instagram can stave off an ever growing competition and grow internationally where it hasn’t been particularly strong.