Facebook, Inc. (FB)  

​Instagram Doubles Advertising Roster in Just Seven Months

Dan weil picture
Dan Weil | FlashRatings | Thursday, September 22, 2016 4:21 PM EDT
Facebook (FB) apparently is firing on all cylinders. Its Instagram division announced Thursday that its portfolio of advertisers now numbers 500,000, up 2 ½ times from February.

Instagram, the photo and video-sharing service Facebook bought for $1 billion in 2012, only began running ads a year ago. Advertisers clearly are attracted by the app’s customer base—500 million monthly active users.

To be sure, Instagram’s 500,000 advertisers pale in comparison to Facebook’s 2 million. But Instagram already has passed up established social media players such as Twitter (TWTR), which has 100,000 advertisers.

More than 1.5 million advertisers have joined Instagram’s Business Tools program in the two months of its existence, the company said. That program enables businesses to create personalized profiles on Instagram through which potential customers can contact them.

Research firm eMarketer estimates that Instagram will garner $1.5 billion of advertising revenue this year, compared to $22.4 billion for Facebook. 

Instagram appears to be sitting in the catbird’s seat for social media services. Its user base will jump 15.1 percent this year, far surpassing the 3.1 percent growth for social networks as a whole, according to eMarketer. Over the next four years, it predicts Facebook’s darling will add 26.9 million users, blowing away all the other social media apps.

Wall Street analysts didn’t offer immediate commentary on Instagram’s ad news. Over the last 30 days, 38 analysts published reports about Facebook, with 33 of them positive. The analysts generated a median share price target of $155, a 19 percent upside to Thursday afternoon’s level of $130.02.