In order to boost advertising revenue, Facebook Inc.’s Instagram is gathering more than 30 advertisers into its Instagram Stories. It is now among one of the company’s rapidly increasing and highly used revenue stream.
Instagram is envisioned as the key player in increasing the advertising revenue of Facebook in 2017. The officials of Facebook briefed about the factors leading to ad revenue growth. In addition, their management further claimed to reach the limit soon for number of ads to display.
Maintaining Facebook’s Growth
According to eMarketer, Instagram is aimed to hit the $3.64 billion mark in worldwide revenue this year. If executed, this will be almost the double of what they achieved in 2016. Growing from 8.4%, it would contribute 12.3% of Facebook’s global ad business this year. As per eMarketer, Instagram is expected to contribute more than 20% of Facebook’s ad revenue in the United States.
eMarketer also claimed that the number of US companies using Instagram will rise from 53% to 74% this year. According to this rate of usage, Instagram is sure to surpass Twitter this year.
Moreover, Instagram will hopefully maintain Facebook’s progress in the digital ad market, ranking second after Alphabet Inc.’s Google, says media buyers.
Head of social for ad agency MEC Wavemaker, Noah Mallinn stated:
“Instagram could end up being as strong a revenue component for Facebook as YouTube has been for Google”
The Instagram Stories
Instagram Stories is a feature of Instagram through which users and businesss can post several photos and videos. Moreover, these posts get deleted itself after 24 hours and are no longer available. Jim Squires, Director of Market Operations for Instagram said that after being introduced in August, it has now reached to 150 million daily active users.
Through the new ad product users can view full screen ads. A user can view the ad occasionally as user swipe through stories in Instagram Stories. As we speak, the company, in collaboration with General Motors CO, Nike Inc. and Airbnb is testing this latest feature.
For the next month National Basketball Association’s All-Star Game in New Orleans airing, Time Warner Inc.’s Turner Sports will run these ads on cable network for testing. Before coming out of the main market, companies usually test the new ad products with selected advertising agencies.
Founder and Chairman of ad agency Deep Focus, Ian Schafer said:
“It’s definitely gained importance”
Furthermore, he also decided to invest more money on Instagram.
Senior VP social media for digital agency Big Spaceship Victor Piñeiro commented
“They just have such a monopoly when it comes to attention that it’s difficult not to have to go that route”
Facebook admitted to its several mistakes it made in evaluating the performance of brands advertising on its platform. Buyers claim that this will hardly have any effect on the efforts of Instagram.
Source: Business Insider