New Instagram Ads on the Explore Tab Could Bring Facebook $1 Billion
Advertising on the Explore tab in Instagram could be worth $1 billion in revenue for Facebook Inc. by 2021, according to Morgan Stanley analysts.
New advertising will appear when users on the photo-sharing social network tap into Explore posts and scroll to see related content, with the main grid to remain ad-free. The move “speaks to how Facebook continues to find ways to extend its earnings runway by monetizing under-monetized engagement and usage,” analyst Brian Nowak says.
Explore can be monetized to the tune of $2 per user by 2021 and user growth rates can be maintained, it could add around $1.2 billion to group revenue, according to Nowak. That would translate to 2% upside to current earnings estimates at Morgan Stanley.
However, we have yet to see whether the new feature will come out soon, how much of the ad spend will be incremental and how much will be drawn from other Facebook products like Instagram’s newsfeed, stories or the Facebook news feed options.
Explore ads are the latest in a line of efforts by Facebook to monetize its products. Watch, Facebook’s video-streaming service, is also expected to be a goldmine for Facebook in the next few years.