Get a demo Do I subscribe? News sign-up
Print

Huge ad revenue growth for Instagram

News, 28 July 2015

NEW YORK: Instagram, the photo- and video-sharing social network owned by Facebook, is forecast to overtake Google and Twitter in terms of US mobile ad revenues by 2017, according to new analysis from eMarketer.

The market research firm calculates that Instagram will generate $595m from global mobile ad revenues this year, but this will rise to $2.81bn by 2017.

That would make Instagram account for more than 10% of Facebook's total global ad revenues – up from 3.7% this year and 7.1% in 2016 – and, with the vast majority of its ad revenue made in the US, that presents a challenge to Google and Twitter.

Instagram is already the second-largest social network in the US after increasing its user base by nearly 60% in 2014 to 64.2m. That took it past Twitter, whose user base in the US grew 12.1% to 48.4m, and Instagram is expected to continue growing to 111.6m users by 2019.

In a sign of how quickly Instagram is expected to grow in the US, eMarketer forecasts that it will have higher net mobile display ad revenues than both its rivals in 2017.

While both Google and Twitter are also expected to increase their US mobile display ad revenues significantly over the next two years, Instagram will grow faster.

Instagram is forecast to earn $570m in net US mobile display ad revenue in 2015, compared with $1.47bn for Google and $1.19bn for Twitter.

But next year Instagram's US mobile revenue is expected to rise to $1.37bn, still behind Google ($1.89bn) and Twitter ($1.72bn), before surpassing them in 2017.

By then, Instagram is projected to make $2.39bn from US mobile ads, edging the social network ahead of Google ($2.38bn) and Twitter ($2.29bn).

"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," said Debra Aho Williamson, principal analyst at eMarketer.

"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."

Data sourced from eMarketer; additional content by Warc staff