Instagram makes major move into advertising business

It’s a major move for the Facebook owned photo sharing app, which is going to almost immediately help transform it into a major mobile advertising business to rival Google and Twitter.

The third-party partners now plugging their software into the API made a co-ordinated announcement about their involvement on Tuesday morning.

By opening up an API to partners, marketers can now — for the first time — start buying Instagram ads and planning their Instagram marketing in a more automated fashion, alongside their other digital ad buys on Facebook, or Twitter.

Before, buying Instagram ads was an exceptional case in the media plan that required contacting an Instagram sales representative directly. That meant Instagram advertising was mostly limited to those willing to make big investments in both budget and time. Starting soon, all advertisers can plan Instagram campaigns alongside their other digital ads, and cross-promote, schedule, and monitor their Instagram marketing activity — including photos that aren’t paid-for ads — across other social networks, all in a self-serve fashion, using third-party platforms.

The Instagram Ads API is the latest in a series of moves the platform has made to start opening up the money jets. Back in June, alongside announcing the API test, Instagram announced that all of Facebook’s ad targeting tools will be opened up to Instagram advertisers. In the same month it also launched “Shop Now” buttons and other messages for advertisers to link outside the app. And earlier this year Instagram introduced “carousel ads,” allowing marketers to fit more images into one single ad.

Analysts and researchers are extremely bullish about the potential for Instagram to become a major advertising business. EMarketer predicts Instagram is on track to generate US$595m in advertising revenue this year, and by 2017 it will be on track to surpass Google and Twitter in terms of US mobile display ad revenues.

In a research note published last month, analysts at Bank of America Merrill Lynch predicted Instagram’s ad revenues could reach near $1bn in 2017, rising to as much as $3.86bn by 2020.

Source: Business Insider UK

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