Picture-sharing platform Instagram is predicted to surpass Google and Twitter in ad revenue by 2017.
This comes after the announcement that it will allow businesses to advertise on the platform, using similar targeting techniques and sale strategies as parent company Facebook.
"We expect to see rapid growth in Instagram's ad revenues this year and throughout the forecast period (2015-2017) ? 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," states a report by eMarketer.
The research predicts Instagram global mobile ad revenue will reach $2.81 billion - up from this year's $595 million - accounting for over 10% of Facebook's global ad revenue.
Balancing act
Instagram previously only allowed big companies to advertise, charging large amounts of money. This month, it announced it will open this feature to all-sized businesses, borrowing techniques from Facebook.
"People want to connect with businesses of all sizes on Instagram, from their favourite local clothing stores and restaurants, to the largest brands in the world. To give all businesses the opportunity to reach the right people, we are working to make Instagram advertising available through an Instagram Ads API and Facebook ad buying interfaces over the coming months," states the Instagram team.
"There are more than two million advertisers who actively use Facebook to market their business and we want to leverage the best of Facebook's infrastructure for buying, managing and measuring the success of ads on Instagram. We will start by opening the Instagram Ads API to a select group of Facebook marketing partners and agencies, and we plan to expand globally throughout the year."
Mike Sharman, MD of digital agency Retroviral, says the new adverts provide amazing opportunity but, "marketers will need to be clever when using the platform to promote brands. Normal adverts won't work; they need to get the balance between product placement and lifestyle right, so as not to interrupt the user's viewing pleasure."
In South Africa, Instagram is growing faster than Facebook did in the same period, says Facebook EMEA VP Nicola Mendelsohn.
Instagram usage in SA grew from 680 000 active users in 2013 to 1.1 million in 2014, according to the latest SA Social Media Landscape 2015 report. World Wide Worx MD Arthur Goldstuck says the highest penetration of Instagram users is under 25 years of age, followed by the 25 to 34 age group, and then those aged 35 to 44.
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