Instagram Hits 1 Million Global Advertisers Mostly from Small Businesses

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It’s owned by Facebook, yet it’s showing faster growth now than its parent company. That’s Instagram for you. Developed in 2010, it was acquired by Facebook in 2012. It’s available in 25 languages and as of the latest count, has 600 million monthly active users (MAUs). From an accessible and free video and photo-sharing app, Instagram continues to grow faster and is now generating revenues proving it’s a hit not only among users but also among advertisers.

Alternative advertising medium

Advertisers who were quick to notice and take advantage of mobile advertising first congregated on Google and Facebook. Advertisers, ranging from those with millions in ad budgets to small startups, realized that they can hit more potential consumers through mobile advertising, as an alternative ad medium, to support traditional advertising methods. With most target consumers who are highly mobile, advertising on mobile platforms allows them to reach target audiences anytime, anywhere, without spending too much.

Investments paid off

Instagram made a hit among users who love to share videos and photos. Since it is a free mobile app, it’s portable and can be used anywhere. Last week, Instagram announced that it has reached over one million advertisers each month, which is five times the number the company had a year ago. Instagram app has a business profile feature, where companies are able to share directions to their businesses together with their contact information. The feature also lets them send messages via the app directly to target audiences.

According to Instagram, they currently have eight million business profiles. The company says that the increase in advertisers is largely attributed to focusing their attention on small businesses, which comprises the biggest bulk of their advertisers. Facebook also continues to provide Instagram with a free suite of business tools that manages to keep the app attractive to users, mostly from companies in the UK, Russia, Indonesia, Brazil and the United States.

Big business

In an interview, James Quarles, VP for Business at Instagram, said that it’s a huge milestone for the company to have over one million advertisers, considering the diversity and scale of the company’s advertisers. He takes it that Instagram is able to invite businesses because it has a variety of niches and popular interests and a unique place where people can watch and keep up with their passions.

Savvy advertisers are able to track and monitor users’ interests, making it easier for them to pinpoint potential consumers where they can direct their ads.

Mr. Quarles sees the big business potential, with their 600 million active users and their more than one million advertisers monthly. eMarketer, a forecasting company, projects that Instagram is capable of generating $3.64 billion in global advertising revenues this year, which is so much higher than what Facebook can generate. The parent company, as of its latest quarter earnings, posted only $8.81 billion. It was only late in the year 2015 when Instagram started to sell advertising spots, supported by FB’s sales and targeting expertise and its over four million advertisers.

Support from tech developments

These social network platforms benefit largely from technological developments and innovations. Providing users free business tools make the app very attractive to small business owners. The Insights feature of Instagram allows businesses to monitor the status of their posts, from the number of views, likes, comments and times their posts were saved. Moreover, it allows them to view user demographics, like their age, gender and location. Businesses with miniscule marketing budgets can also see the organic performance of their unpaid posts. The data provide them the basis to make a decision on whether or not to promote their product and brand.

Instagram is very useful for businesses that do not have websites and in the case of those who do maintain websites, suffer from low traffic count. It helps that the app is quite easy to use, and four taps on their mobile device enable them to create a campaign just from their business profile. Sister apps to Instagram help in creating looping videos, time-lapse videos and even animated ones. Instagram also has a feature to create carousel ads that can contain a message and several products from multiple posts of videos and photos.

Quarles says small businesses can start small and grow with Instagram. Soon it will launch another tool that will be available to its global users. It is a booking tool that will help users set up appointments and reservations with service companies via their business profiles. Instagram’s other app, Stories, is also becoming a hit among advertisers, because they are able to provide an experiential ad, with colorful text and graphics to accompany video clips and photos.