Last week, eMarketer made a prediction that may have induced a pandemic of chin-scratching.

They forecast that Instagram will earn $595 million in ad revenue this year, which will swell to $2.81 billion by 2017:

Instagram Marketing

According to eMarketer, this growth will be “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, it is expected that Instagram’s global market revenues will account for over 10% of parent company Facebook’s global ad revenue. Beyond that, if this forecast figure is achieved, it would exceed the net mobile revenue for both Google and Twitter:

Instagram Marketing


The vast majority of this revenue will be generated in the US. At present, Instagram advertising is only available in seven international markets, including Australia, Brazil, Canada, France, Germany, Japan, and the UK. However, eMarketer is confident that, as time progresses, “non-US revenues will comprise a growing share of the pie.”

Though Instagram’s international growth is comparatively slow, last year the platform surpassed Twitter as the second largest social network in the US.

As Instagram only recently started to sell advertising space, here’s a quick primer on what brands and marketers might expect now that they’ve a whole new channel to play with.

Instagram Marketing – Your Essential Guide

If you’re unfamiliar, Instagram is a social media platform with an emphasis on photo sharing. Its most remarkable feature is the ability to apply filters to your photos. At the touch of a button, an image captured on a smartphone in 2015 can be made to look like a bleary Polaroid from 1972.

Facebook bought Instagram in 2012; and given that Facebook is one of the richest brands in the world, they were in no real hurry to monetise their shiny new toy. Though the first ever ads appeared as early as November 2013, only now, nearly three years later, have adverts really taken off on the platform. This is what they look like:


Instagram Marketing

Interestingly, Instagram founder Kevin Systrom once pledged to personally vet all Instagram ads before they hit the direct stream. This was likely in response to the hostility the platform faced every time they announced their plans to monetise.

The idea is to make the ads looks as little like ads as possible – each of the above could easily pass for a standard Instagram post, the type that’s uploaded by an independent, private user. It’s only when scrutinised, and when you notice the “sponsored” tag in the top right hand corner, that these register as ads.

It’s still early days for Instagram ads. Last year, Facebook admitted that, initially, their focus isn’t on making money. Rather, they’re looking to collect data on what works.

As a result, in these early days, brands should not view Instagram as a guaranteed revenue stream. Instead, it should be viewed as a means of reaching a wider audience and encouraging engagement. Followers, comments, and likes aren’t as important as reach, ad recall, and brand awareness.

Initial experiments with Instagram ads enabled brands to achieve a wide reach with a comparatively low average frequency of impressions per user. Targeting people aged 18-35, Ben & Jerry’s reached 9.8 million people in just over eight days. True, they’re a beloved multinational with an established US audience, but this still provides a great example of just what’s possible with Instagram ads.

Instagram Layout

A Good Instagram Marketing Strategy

Given the focus on photography and, increasingly, video loops, Instagram should not be used to promote specific products and services. It should be used to sell an image of what your brand stands for.

So far, brands with a strong visual identity have enjoyed the most success when it comes to Instagram advertising. However, with a focus on creativity that stretches beyond branding, any business from any sector potentially stands to benefit.

Eventually it will be possible for brands to offer specific calls to action, such as “shop now” and “install now”. While these options may bridge the divide between social media and ecommerce, it will likely still be the case that creative and visually striking ads will enjoy the most success. An image of your product, coupled with a sales message, simply won’t cut it. Instagram is a branding environment. Explicit sales pitches will sink without a trace.

In these early days, the biggest danger is that scores of brands will rush in to Instagram marketing without first taking the time to familiarise themselves with the platform, and with the way its users interact with the content. So far, only the biggest of brands have had any success on Instagram, and even then, their efforts have been entirely focused on the US market.

These are the sort of brands that are so big that they can afford to experiment with new platforms. They don’t have to prioritise revenue. They’re free to test, and to develop best practice techniques over time.

If you want to make Instagram part of your digital marketing strategy, hold back for now. Let the multinationals test the waters and define the parameters for success. Watch carefully, and learn not just from their success, but also from the many mistakes that are bound to be made.

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