Facebook-owned Instagram took a great step forward last week when it opened up its API, or application programming interface, for ads. With more than 300 million users, the photo and video platform has officially signed its success in the advertising world by virtually putting up a sign that says “open for business.”
News on the move barely reached the mainstream media, but that was expected. Few people outside the tech world are interested in API ads, but it’s actually a big deal: it means that almost anyone with knowledge of online tools that plug directly into Instagram can now use the platform for their own advertising.
Currently boasting ad revenue of $595 million a year, the advertising behemoth is expected to spike to $2.8 billion by 2017, and that’s partly thanks to the new API system. If such predictions become reality, even tech giants like Google and Twitter will be left in the rearview mirror.
Marketers have long coveted Instagram, mostly because of its unstoppable record of attracting new and active users. In this respect, the network is believed to have surpassed Twitter and LinkedIn, having only its parent company, Facebook, to look up to.
More than that, Instagram showed the fastest expansion, at an incredible rate of 50 percent during 2014, a time when both Twitter and Facebook have been lagging behind and plateauing around the same figures.
Instagram also has the benefit of attracting a considerably younger usership, with 44 percent of its users aged between 18-29, compared to Facebook’s 23 percent and Twitter’s 33 percent. And even though the company has been famously cautious about rolling out ads, it turns out that they had no reason to fear.
Ever since the network started testing the platform for ads back in 2013, the response has been nothing but positive, with users reporting 2.8 times higher recall versus the traditional online ad formats.
Instagram’s new API offering that allows third parties to purchase ads on the platform has been called “one of the most anticipated moments in the evolution of advertising.” Think that sounds over-the-top? Imagine the result of the unusual mixture of substance and style: Instagram benefits from Facebook-powered analytics, but it adds great aesthetics.
Considering that more than three-quarters of Facebook’s revenue comes from mobile ads, Instagram – which is mobile-only – has just become an even more crucial contributor to the tech giant’s deep pockets. Buckle up, Instagram, and enjoy the ride to becoming a multibillion-dollar ad giant in the years to come.
Image Source: Digital Marketing Suite