With 200,000 advertisers who are now using Instagram, the Facebook-owned social media app is proving to be a growing destination for brands to reach the app’s 400 million users. But the key to getting more advertisers and keeping them happy will be to offer them new ways to engage and reach people.
On Tuesday, Instagram debuted three new features for businesses using Instagram, including business profiles. Businesses will have the ability to have a “contact” button on their profiles, where they can choose how they want customers to contact them. Businesses can choose to put have customers call, text, or email when Instagram users press the “contact” button in the profile. Users will also be able to choose to get directions to the business.
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Previously, Instagram only allowed businesses to understand the reach of their Instagram posts by number of likes and comments. But with Tuesday’s update, Instagram is giving businesses deeper analytics, even if the post isn’t an advertisement. Businesses will be able to see new data like how many people the post reached, how much traffic a post drove to the business’ website, or how the post performed comparable to other posts.
If a business wants to turn a post into an ad, Instagram is letting businesses do so from within the Instagram mobile app. Previously, businesses could only create and post ads from the web-based Facebook ad manager. With the new feature, a business can pick a post they have already shared, select a target audience, or let Instagram target audiences for the business. As James Quarles, Instagram’s global head of business and brand development, explained, this is the first time businesses can create ads directly from an app, which is a feature parent company Facebook has been offering its advertisers for some time now.
One of the advantages Instagram has when engaging businesses and building out its ad business is using the playbook that Facebook used when it was creating its ad business, which brought in $5.2 billion in revenue in the first quarter of 2016.
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Facebook hasn’t yet released any numbers about how much revenue Instagram’s ads are bringing in, but analyst estimates show that it could be a massive business already. Credit Suisse estimated that Instagram’s ad business brought in $730 million in revenue for the fourth quarter of 2015, projecting $3.2 billion in revenue this year. By 2017, Credit Suisse predicts Instagram will be a $5.3 billion business.