Instagram Experiences Growth In Advertising Revenue

Instagram said it has more than 200,000 active advertisers now since introducing the service last September. This is an impressive growth considering that the photo-sharing app only had a few hundred subscribers in June 2015.

The Facebook-owned company revealed that 75 percent of its advertisers are international brands from outside of the US that uses the platform to raise brand awareness and increase sales. This includes German supermarket REWE that ran an Instagram ad campaign leading to a 40 percent improvement in ad recall.

One reason for Instagram’s success is because its parent company is careful with opening up advertising opportunities to businesses despite acquiring Instagram five years ago. “We monitor it [ads] very carefully and we’re going to continue to monitor really carefully,” Facebook Chief Operating Officer Sheryl Sandberg told investors in November.

Independent market research company eMarketer said in 2015, profits from Instagram’s mobile ad make up just 3.7 percent of Facebook’s total ad revenue. They expect by 2017, this number will more than triple to reach 10.6 percent of Facebook’s ad sales.