Instagram More Than Doubles Advertiser Base In Six Months

September 22, 2016, 1:00 PM UTC
An Instagram employee takes a video using Instagram's new video function at Facebook's corporate headquarters during a media event in Menlo Park, California on June 20, 2013.
Photograph by AFP — Getty Images

Instagram now has 500,000 advertisers, more than double the number it had in February, the Facebook-owned photo and video sharing app said on Thursday.

Acquired by Facebook for $1 billion four years ago, Instagram only opened up its advertising program in September. The fast rise shows a strong momentum with advertisers that want to reach its 500 million monthly active users.

Instagram’s advertiser numbers, however, are still far cry from that of Facebook, which is estimated to have 2 million advertisers. But Instagram has already surpassed other, older social media sites like Twitter, which has just over 100,000 advertisers.

Instagram’s COO Marne Levine said that while the most of the world’s top brands are currently advertising on Instagram, most of the social app’s advertisers are small businesses.

Many of these businesses also advertise on parent company Facebook, but some are just spending money to advertise on Instagram, she added. That could be because the app is particularly popular amongst Millennials. According to an E-marketer report, this year, there will be 48.2 million millennial Instagram users in the US. By 2019, nearly two-thirds of all millennial smartphone users will use Instagram.

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Instagram also released new data about the location of its advertisers, showing the app’s international appeal. The five countries with the most advertisers are U.S., Brazil, U.K., Australia, and Canada.

The top five industries represented are consumer-packaged goods, e-commerce, retail, entertainment, and technology.

Since opening the door to advertising a year ago, Instagram said there have been 1 billion ad “actions,” a term that could include a click on an ad or a follow of a brand’s Instagram account. In some cases, Levine said that the value of Instagram ads extends beyond just clicks on mobile phones because such ads have contributed to a 2% increase in sales for many advertisers who placed an ad on the app.



Facebook hasn’t yet disclosed any numbers about how Instagram’s ad revenue, but analysts say that is already a massive business. Credit Suisse estimated that Instagram sold $730 million in ads during the final three months of 2015, and projected $3.2 billion in revenue this year. By 2017, Credit Suisse said Instagram would have $5.3 billion in sales.

But Instagram has been facing competition from rival social mobile app Snapchat, which has integrated advertising since October 2014. In June, Snapchat, which has 150 million users, started letting advertisers buy their ads in an automated way. According to leaked documents, Snapchat said it expects revenue of about $300 million this year and $500 million to $1 billion next year, which is less than Credit Suisse’s estimates for Instagram.

A possible advantage for Instagram is its ability to use technology from Facebook’s own colossal mobile advertising business, which accounted for $5.2 billion of the social network’s $6.2 billion in second quarter revenue. Levine said that Instagram is “leveraging Facebook targeting to put the right ads in front of people at the right time and to understand importance of measurement.”

“Facebook has developed successful model and now we are learning and growing together,” Levine said.

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