Facebook, Instagram to control 65% of social media budgets this year

A report by eMarketer forecasts that Facebook and Instagram would control around 65 per cent - the equivalent of roughly $16.3 billion - of the social-media budgets this year, while the share of Twitter would decline.

eMarketer expects overall social ad spending to reach $25.1 billion in 2015, up from $23.7 billion projected in April.

The researcher's estimates had largely been driven by Facebook and Instagram's ad business, which was expected to grow 42 per cent over 2014.

After it opened its promos to all advertisers a few months ago, Instagram is expected to bring in $600 million this year, or about 5 per cent of Facebook's total ad revenue, eMarketer said.

By 2016, the app would generate around $1.5 billion in ad revenue, an increase of 149 per cent year-over-year.

Globally, Facebook would make nearly $12.80 in ad revenue per user this year and $48.76 per US user in ad revenue, eMarketer said.

While advertisers were starting to buy more Instagram ads, the app's user base was also growing quickly. The photo-sharing platform yesterday announced it had 400 million monthly users, up from 300 million earlier this year.

Meanwhile, Twitter was expected to lose a bit of steam, the report added.

Meanwhile, the 400 million user milestone, had significant implications on the social network's ad revenue, according to commentators.

According to eMarketer, Instagram's mobile ad revenue would surpass that of Twitter and Google by 2017, and according to some commentators,  eMarketer's $2.81 billion mobile ad revenue figure for Instagram in 2017 was actually conservative, considering newly opened international growth opportunities.

Increasing domestic popularity among the key teen demographic, coupled with these newly-opened international growth opportunities, ensured that Instagram would emerge as a sizeable piece of the Facebook ad revenue pie in the near future.

Advertisements brought Facebook around 94 per cent of its net revenues through the first six months of 2015. According to the social network's estimates, about 76 per cent of total advertising revenue in the second quarter was from mobile advertising amounting to $2.9 billion in mobile advertising revenue in 2Q15 for Facebook.

With the phenomenal rise of social media, automobile companies are looking to leverage its potential as a marketing medium to tap younger customers as clearly seen in the doubling social media ad spend on sites like Facebook and Twitter. (See: Auto makers take to social media to tap young customers).