How Instagram Will Benefit From The Advertising Industry
Instagram just launched an application-programming interface (API) which will expand the ways businesses will be able to spread adds through social networks. But this is not only a positive news for companies, as this API will also considerably increase Instagram advertisement revenues. The photo social network expects that those revenues will reach $2.8 billion by 2017, whereas currently they only reach $595 million.
Instagram is a relevant tool for companies, as the image-based social network counts up to 300 million users – more than Twitter and LinkedIn, but so far for businesses it has been very difficult to benefit from it. They had to pay a minimum of $200 to purchase ads on Instagram and moreover their ads had to be strictly accepted by an Instagram salesperson.
Thanks to the innovative API, Instagram will enable businesses to take part in the social network; businesses will use a third-party site in order to create, target and put an ad. The ad-buying process will be much more easier as the API automates all purchases of Instagram ads. Like Hootsuite, advertisers will be able to set up their ads in advance and transfer them to other social networks as Facebook and Twitter.
Nevertheless, the risk is to bother users with too much useless information through the ads diffusion. Instagram will have to manage this potential fault source properly. If the company will succeed in maintaining its users satisfied, as a result the revenues would rise significantly.