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Instagram Expected To Earn More Mobile Advertising Revenue Than Google By 2017

Jul 28, 2015 03:59 PM EDT
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(Photo : Getty Images/Lionel Bonaventure ) According to a study by eMarketer, social media app Instagram is on track to surpass Google's U.S. mobile display ad business.

According to a study by eMarketer, social media app Instagram is on track to surpass Google's U.S. mobile display ad business. 

Independent market research company eMarketer predicts that Instagram will earn $2.81 billion from mobile advertising revenues within the next two years. The projected revenue is more than four times the $595 million that the photo sharing platform is expected to generate for 2015. 

This year, Instagram's ad revenues are probably going to make up only 5 percent of parent company Facebook's total ad sales. According to eMarketer, this number will almost triple to 14 percent by 2017. 

WWD reported that this massive revenue growth will mostly come from Instagram's new ad programs and a more open advertising network, which are both currently in the works. In the past, these initiatives were limited to only a handful of select marketers.

Back in November 2013, Michael Kors debuted the first-ever Instagram ad. 

In related news, e-commerce giant Amazon is also on track to beat Macy's Inc. as the largest apparel retailer in the U.S. by 2017, according to a report last week by Cowen & Co. 

"In 2009, Amazon had 30 fulfillment centers, and they ended 2014 with around 110," John Blackledge, a director at Cowen, told WWD. "The growth of Amazon will continue to be huge relative to players growing one and two percent or declining. They are beating up the B- and C-mall apparel companies."

Currently, Amazon carries more than 2,500 apparel brands and 70 percent of its total revenue comes from apparel and accessories. (Its top 10 performing first-party brands are presently Calvin Klein, Disney, Columbia, Anne Klein, Diesel, Tommy Hilfiger and Levi's.) 

Cowen's data predicts that apparel sales on Amazon.com will reach $16 billion this year and over $52 billion by 2020. Amazon's sales make up 5 percent of the apparel, accessories and footwear market, while Macy's commands 7 percent.

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