How Instagram Became An Amazingly Valuable Acquisition For Facebook

After just 18 months in business, Instagram had made enough of an impact for Facebook to open up their check books to the tune of $1 billion. Since then, Instagram has managed to position itself as the 20th most popular website in the world with a cool 730.5 million average monthly visits.

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Average monthly visits to Instagram between May ’14 – Oct ’14 by SimilarWeb PRO

We couldn’t resist taking a look beneath the surface of such huge traffic, so used SimilarWeb to analyze just how they’ve become so successful.

How Do People Get There?

People absolutely love celebrities and looking at their photos online has become something of an obsession for us. SimilarWeb shows that out of the top 20 non-branded keywords, 16 refer to a celebrity.

Dan Bilzerian has taken the platform by storm with photos of his luxurious and aspirational lifestyle striking a chord with the public. This success has led to Dan chalking up just over 5.3 million followers on Instagram.

The other celebrities making up the top 20 include the usual suspects such as Justin Bieber, Kim Kardashian and Selena Gomez. All three have over 15 million followers each, so it’s no surprise that Instagram generates such huge traffic.instakeywords

Growing Interaction With Facebook

Facebook’s purchase of Instagram wasn’t simply a case of Mark Zuckerberg wanting to create nice portfolio of digital real estate. He wanted to help enhance the Facebook experience and this is demonstrated by the Social traffic that SimilarWeb has unearthed.

Over the last 6 months over a whopping 1.5 billion visits to Instagram have been referred from social pages and over 64% of this comes via Facebook. This indicates people are sharing more and more of their Instagram photos on Facebook. With Facebook being the number one ranked site in the world, it’s not surprise that Instagram are receiving mammoth levels of traffic.

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Top referring social sites to Instagram between May ’14 – Oct ’14 by SimilarWeb PRO

 

Success of a Brand

Search and Social have proved very useful sources of traffic for Instagram, but they have also helped build Instagram into a highly successful  brand. Direct traffic makes up 44.30% of Instagram’s traffic and it sounds even more impressive when SimilarWeb reveals that this equates to over 300 million visits per month.

Traffic_Volumes_by_Source_from_May__2014_to_Oct__2014

Direct traffic volume between May ’14 – Oct ’14 by SimilarWeb PRO

 

 

 

 

 

Prospective Ads Revenue

Advertising hasn’t really kicked off on Instagram yet as they’re keen to ensure they can provide an experience which benefits their community and their ad partners. However, just how much could they be making?

We begin to get close to a figure if we use Facebook’s desktop revenue as a benchmark and work this against SimilarWeb’s data on desktop visits for Facebook and Instagram. Assuming that the ads have the same cost per impression, Instagram could expect to be making around $34 million dollars quarterly. Of course, that’s only from desktop traffic, not mobile traffic which is where Instagram’s real potential is.

62% of Facebook’s revenues in Q3 2014 came from mobile; looking in SimilarWeb’s Top Apps tool, you can see that the Instagram app is directly behind Facebook in the Apple Store and almost as close in Google Play. This close proximity leads us to believe that Instagram has a much greater ads revenue potential in mobile rather than desktop

Top Apple store free Apps by SimilarWeb PRO

Top Apple store free Apps by SimilarWeb PRO

 

Top Google Play free apps by SimilarWeb PRO

Top Google Play free apps by SimilarWeb PRO

Final Word

$1 billion is a lot of money, but word on the digital street is that Facebook got a real bargain with Instagram. By tapping into the zeitgeist of celebrity culture and the neverending selfie obsession, Instagram has managed to satisfy a huge audience’s needs. This has helped Instagram achieve massive amounts of traffic and is only the beginning of their success. Once they monetize their site it will send them into the stratosphere.

About the Author -

Natalie Halimi is the Head of Marketing Communications & Education at SimilarWeb. With over 10 years of experience in marketing, Natalie has promoted services and products in the B2C and B2B arenas, in various industries.

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