There’s been some question as to whether Instagram can stay true with its display ad set-up, but there’s no question that the Facebook-owned site will see positive results from it.
A report from Marketing Land indicates that, per results posted by industry analyst eMarketer {link no longer active}, Instagram will make a whopping amount of money from display ads. This year alone, it’s expected to bring in $595 million in ad revenue — and that number will grow even bigger by 2017, when it’s expected to make an incredible $2.81 billion. That’s more than 10.6 percent of Facebook’s complete ad revenue for 2017, according to the site.
As you can see from this chart, Instagram will easily lap over Facebook’s numbers year over year, going more than double over its revenue for display ads by next year, and then doubling again the year after that. This is for paid advertising only, but still very effective in the long run.
What’s more, these numbers will give Instagram the need to overcome both Google and Twitter, two competitors in the display ad field. For this year, Google will continue to have the lead with $1.47 billion, with Instagram just under half that. But as you can see, the next couple of years will really tell a story, as Instagram begins to catch up and, by 2017, rises above Google by a small margin.
If these forecasts stay the course, that would mean huge benefits for Facebook — and a mounting lead in the social media division. “Now that Instagram is opening up, there is a lot of pent-up demand,” said Debra Aho Williamson, principal analyst for eMarketer. “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.”
It definitely looks like Instagram is going places with its new approach. Let’s see how it fares…