Photo-sharing platform Instagram is expected to top two billion dollars in ad sales by 2017, according to a report by eMarketer, stating that the social media app will outsell Google and Twitter when it comes to US display ads.
Instagram has been slowly developing its advertising model with sponsored images and videos as well as automated tools for delivery and measurement, which have been mainly used by fashion brands, and this year the platform will generate almost 600 million dollars in ad sales.
The report states that Instagram’s ad revenues will see a “rapid growth” and that by 2017 its global mobile ad revenues will reach 2.81 billion dollars, which will account for more than 10 percent of parent company Facebook’s global ad revenues.
Debra Aho Williamson, eMarketer principal analyst, 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.”
The majority of the ad revenue is expected to come from the US, especially as Instagram advertising is only available in seven international marketing including, the UK, Australia, Brazil, Canada, France, Germany and Japan, which eMarketer forecasts will only account for around 30 million dollars this year.