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Instagram just made a major move that will turn it into a huge advertising business

Aug. 4, 2015, 4:30 AM

As Published in Business Insider

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Instagram has officially switched on its advertising API (application programming interface). It’s a major move for the Facebook-owned photo-sharing app that will 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 coordinated 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, plan, 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 $595 million 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 $1 billion in 2017, rising to as much as $3.86 billion by 2020.

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The Instagram Ads API ‘is one of the most anticipated moments in the evolution of advertising’

Social media management company Hootsuite explains in a press release why the new feature will be so useful for marketers: “This integration will also make marketers and social-media managers more efficient as they will no longer have to switch between their phone and computer to track all aspects of a social-media campaign. For example, if a new product is launched, responses to comments and engagement with users on Instagram can be carried out from the same window that is being used to engage followers on Twitter and Facebook. Everything is in one place.”

Ads API partners that have been announced so far include some of Facebook’s biggest marketing partners: Kenshoo, Brand Networks, Salesforce Marketing Cloud, Unified, SocialCode, 4C, Nanigans, and Ampush.

Jamie Tedford, Brand Networks CEO and cofounder, said in an emailed statement that advertisers had been “eagerly awaiting” the chance to bring their content to Instagram.

“Now, Instagram is bringing on experienced Facebook Marketing Partners to help brands use the same advanced Facebook targeting tools to create and deliver relevance-driven ad campaigns that increase ROI [return on investment] by reaching the right audience, at the right place and time,” he added. “This is one of the most anticipated moments in the evolution of advertising, and we expect the platform’s offering will continue to expand rapidly.”

Tuesday’s announcement is just the first round of companies joining the API, with more expected in the future.

An Instagram representative said: “The Instagram Ads API will help us make ads more relevant to the community, serve more diverse business objectives, and make buying on the platform easier for advertisers. We started working with a group of Facebook Marketing Partners a few weeks ago and they’ve brought great experience and technological savvy onto the platform. We’ll continue to build upon the Instagram Ads API in the coming weeks and months.”

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