How Instagram’s mobile ad revenue will overtake Google and Twitter
Instagram is set to hit $2.81bn in mobile ad revenue globally by 2017 according to an eMarketer forecast, surpassing the likes of Google and Twitter in the US.
The mobile-only forecast shows that Instagram will make up 5% of Facebook’s global mobile ad revenue this year ($595m), increasing to 14% in 2017.
While the platform’s advertising capability is also available in Australia, Brazil, Canada, France, Germany, Japan and the UK, the US will account for 92% of Instagram’s total mobile ad revenue this year, a number that is set to drop to 85% by 2017.
Pent up demand
According to eMarketer the predicted rise in revenues is largely due to high demand for Instagram’s new ad product launches.
Debra Aho Williamson, principal analyst at eMarketer said: “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.”
Using targeting and creativity to drive revenues
Earlier this month the company said it will allow brands to reach the 300 million users that actively use the photo-sharing app each month, 14 million of which are in the UK, by offering more targeting advertising.
Amy Cole, head of brand development for EMEA at Instagram, said: “As we build products and features, we’ll start to implement all of the targeting options that are available on Facebook.
“We’re starting to see advertisers using both platforms and we’re seeing success in campaigns that use both,” she added.
Since launching Instagram ads in the US a year and a half ago, the platform has seen almost 500 global advertising campaigns.
In May Instagram launched carousel ads, which allow users to swipe right to see up to three images from a brand on a single post and includes an option for brands to link off-site, allowing users to buy what they see for the first time.
The brand has seen “incredible success” in its advertising so far according to Cole, with 97% of campaigns generating a “significant uplift” in ad recall and an average 16 point lift.
In a study conducted for Instagram by research agency Sparkler in May, compared to four other social networks respondents said that Instagram was “the most inspiring and beautiful social network for brands to share creative campaigns”.