Instagram Mobile Ad Revenues to Reach $2.81 Billion Worldwide in 2017 - eMarketer

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Instagram Mobile Ad Revenues to Reach $2.81 Billion Worldwide in 2017

Instagram will surpass Google, Twitter in US mobile display ad revenues by 2017

July 27, 2015

Instagram will bring in $595 million in mobile ad revenues worldwide this year, according to eMarketer’s first-ever forecast of how much advertisers will spend on the social network.

Instagram Net Mobile Ad Revenues Worldwide, 2015-2017 (billions and % of Facebook total ad revenues)

We expect to see rapid growth in Instagram’s ad revenues this year and throughout the forecast period—driven by high demand for the social network’s new ad products, which will expand beyond branding to include direct response, the ability to buy ads via an API, and enhanced measurement and targeting features.

By 2017, Instagram’s global mobile ad revenues will reach $2.81 billion, accounting for over 10% of parent company Facebook’s global ad revenues. The forecast will be featured in an upcoming eMarketer report, “Instagram Advertising: What Marketers Need to Know.” This report features eMarketer’s first forecast for Instagram revenues, as well as an analysis of what marketers should know about Instagram’s user base and its new ad products, including best practices for getting the most out of them.

“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,” said Debra Aho Williamson, eMarketer principal analyst.

Instagram does not currently have a desktop-based ad product; eMarketer’s estimates for Instagram ad revenues are mobile-only. Instagram’s ad revenues will make up 5.0% of Facebook’s mobile ad revenues this year, and that share will increase to 14.0% in 2017, eMarketer forecasts. In the US, respective figures will come in at 10.7% and 28.0% in 2017.

Instagram Net Mobile Ad Revenue Share of Facebook Mobile Ad Revenues Worldwide, US vs. Non-US, 2015-2017

Throughout the three-year forecast period, Instagram will make the vast majority of its ad dollars in the US, though non-US revenues will comprise a growing share of the pie. eMarketer forecasts that Instagram will have just $30 million in ad revenues outside the US this year, or 5.0% of the total. Meanwhile, the US will account for 92.0% of the total in 2016 and 85.0% in 2017. As of July this year, Instagram advertising is available in only seven international markets: Australia, Brazil, Canada, France, Germany, Japan and the UK.

Instagram’s monthly US user base increased nearly 60% in 2014 to 64.2 million people, eMarketer estimates. By 2019, over one-third of the country’s population is expected to use the social network, amounting to 111.6 million consumers.

Instagram, Google and Twitter Net US Mobile Display Ad Revenues, 2015-2017 (billions)

In a sign of just how quickly Instagram is expected to grow in the US, eMarketer forecasts that it will have higher net mobile display ad revenues than both Google and Twitter in 2017. Last year, Instagram surpassed Twitter to become the second-largest social network in the US. Twitter’s US user base grew 12.1% in 2014 to reach 48.4 million users.

Internationally, Instagram’s growth hasn’t been as strong, and other mobile social apps will continue to challenge it. So far, however, brand engagement on the platform has been high, and coupled with a solidly growing user base and new ad offerings, the mobile ad revenue picture looks bright.

eMarketer’s forecasts and estimates are based on an analysis of quantitative and qualitative data from research firms, government agencies, media firms and public companies, plus interviews with top executives at publishers, ad buyers and agencies. Data is weighted based on methodology and soundness. Each eMarketer forecast fits within the larger matrix of all its forecasts, with the same assumptions and general framework used to project figures in a wide variety of areas. Regular re-evaluation of available data means the forecasts reflect the latest business developments, technology trends and economic changes.


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