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Instagram Set To Pay Significant Dividends For Facebook

June 27, 2016 by in category News, Social Media with 0 and 0

When Facebook acquired Instagram in 2012 the most frequently asked question was “why?”. Although the photo sharing service was reasonably popular, it did not have the kind of membership figures which either Facebook or Twitter had, and few if any could see any potential to monetise it. In terms of this, Instagram at the time was rather affectionately yet dismissively described as having “a whole lot of soul and a whole lack of money”. In just four years, however, Facebook have – not for the first time and you suspect not for the last – shown astonishing foresight in their investment.

Recently released figures have shown growth in the two key areas required for any online business success – the number of users and the number of advertisers. In respect of a user base, Instagram now has some 500 million regular monthly users, making it second only to Facebook itself in social networking popularity. The high volume of users has been reflected in the rapid growth of advertisers on the service, with the figure going from 0 (zero) to 200,000 in the space of a year. Should the current rate of growth continue – and all indicators suggest that it will – then Instagram is anticipated to be a $9billion a year business by 2020.

One of the most interesting aspects of Facebook’s success with Instagram has been their ability to defy expectations in terms of users vs advertisers. A widely held view is that the arrival of advertising on social networking services is usually met with a fall in users. The innovative and non-intrusive way in which advertising features on Instagram has met with the approval of all parties involved.

The success Facebook has achieved with Instagram thus far has defied the conventional expectations which were in place when the deal was announced. It would be fair to suggest that this is another example of why it is a mistake to apply a traditional view of business planning in the online environment.

For businesses in the UK and around the world the most significant implication of the Instagram story at this stage is that they need to secure their presence on this social network. The high number of existing users is growing on a daily basis, and it’s vital to ensure that your brand is registered and your business is accessible through it. Our team of social network experts are here to help you ensure your professional profile is in place.

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