Instagram ad revenue projected to increase 47% in 2020 despite declining US user growth

Anne Freier

In App Business. January 6, 2020

Instagram users in the US are projected to have dropped, for the first time, from 10.1% in 2018 to 6.7% in 2019. That’s according to research by eMarketer which finds that overall growth will be much slower in 2020 until 2023.

For 2020, US Instagram users will grow 4.5% to 112 million, revised from 5.4%.

The research firm claims that the drop is largely due to older users joining the platform less rapidly as previously anticipated.

“Instagram is doing really well—it is the second-most internet-penetrated social media platform in the US behind Facebook, and despite increased pressure from competition, we expect it to maintain its second-place position with a good gap from the rest of the platforms,” explained Nazmul Islam, a junior forecasting analyst at eMarketer.

Although millennials are contributing to the growth with gains of 11.4% expected, there’s a lot of competition from other platforms such as Snapchat and TikTok.

Meanwhile, Instagram is doing well in terms of ad revenues. In 2019, ad revenues reached $9.45 billion and is expected to rise 46.6% to $13.86 billion in 2020.

The imaging app has been bolstering its ad options with the addition of augmented reality shopping ads and the launch of ads in its Explore section.