The social media company is expected to raise massive amounts of revenue from Instagram's ad platform in the coming months, according to analysts.
Facebook Inc has been under close inspection of analysts for quite some time since the social media company is always carrying out activities to bring about positive changes in the firm. Recently, analysts at Raymond James carried out a research on the stock and business activities of the media firm and resulted in suggesting an ‘outperform’ rating to the firm. The social media giant has also managed to score a price tag of $90 by the equity firm analysts. The social networking platform has recently announced that it will be using Instagram as an enhanced advertising platform, something that it was not doing before.
A few days ago, Facebook expressed its interest in expanding its advertising business to Instagram as well and discussed the possibilities of making the platform an easier one for the companies who wish to advertise on the app. Raymond James analysts are of the opinion that through the newly found advertising platform, Facebook sales can shoot up to no end and it would be advisable for the firm to carry on with its plans to make things work in this regard. If all goes according to plan, then it has been speculated that the social media giant will be able to raise huge amounts of revenue from the platform in the coming months, as it did in 2013.
Instagram is Facebook’s recent acquisition which was first met with criticism from analysts but later on, keeping in mind the increasing active users on the app, the analysts changed their opinions and started seeing it as another way through which the firm can boost revenue generation. The social networking giant has also emerged to have great plans where it wishes to cash out fame that the photo sharing app has been receiving over the period of time. It is also to be believed that the increasing fame of the app is going to attract all the more advertisers towards it.
From the announcement that was made by Facebook regarding the expansion of Instagram where it discussed the process of making it a platform for advertisers, analysts have become quite bullish about the perspective of the media company widening its position in the advertisement industry, which is why the ratings have been notably increased on the price targets.
Raymond James has shown its expectation from Instagram to grow to over a $500 million by the end of the current year. Furthermore, the revenue is still expected to increase in 2016 to $1.1 billion and in 2017, it is expected to reach a mind-boggling $2 billion on a yearly basis.
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