Instagram Influencer Marketing Is A 1 Billion Dollar Industry

How Big Is Instagram Influencer Marketing? [INFOGRAPHIC]

UPDATE May 5, 2017 — Much has changed on Instagram is the last 10 months. Instagram has introduced new features like Instagram Stories (which closely mimics Snapchat’s core function and has carved deeply into Snapchat’s growth numbers), Live, and Galleries. These new features have drawn users faster than ever before, and Instagram’s platform has continued to grow quickly. In an effort to keep this article as accurate and helpful as possible, we’ve updated it with the most up-to-date information and statistics. We’ve preserved the original text of this article and have added clearly-marked updates below select passages.

Since 2011, Instagram has been one of the fastest growing social media platforms. In the past six months alone, it’s added over 100 million users and growth shows no signs of slowing. With over 600 million global users (80% of whom come from outside of the U.S. and over 400 millionof whom check Instagram every day), Instagram is one of the most far-reaching and highly engaged social media networks in existence today. It’s also become one of the largest pieces of the nascent influencer marketing industry.

UPDATE: April 2017 propelled Instagram past 700 million monthly active users and saw a reported daily active user base of 200 million users for Instagram Stories alone.

Instagram Influencer Marketing Could Reach $ 2 Billion By 2019

Instagram Influencer Marketing Infographic Industry Market Size

Instagram Influencer Marketing Growth

The decline of traditional TV and the growth of social media have given rise to influencer marketing, now one of the fastest growing categories in advertising and projected to be a $5-10 billion market by 2020. Instagram is one of the most quickly developing segments of the growing influencer marketing market. But lack of transparency and reported metrics with regards to advertiser spend mean that there’s no official tally on the size of the Instagram influencer market. So to estimate the size of that market, we created a projection based on our research.

From micro-influencers making $50 per post to Instagram superstars like Ariana Grande that command half a million dollars per post, the Instagram influencer market runs the gamut in terms of following, audience, and engagement; but it has even the biggest brands buying in. Target, H&M, Adidas, Samsung, American Express, Toyota, Fairmont, Microsoft, and many more brands are finding ways to partner with Instagram influencers to reach audiences.

To estimate how much money advertisers spend on influencer marketing on Instagram, we tracked the number of sponsored Instagram posts over a year. At present, we estimate the advertiser spend with influencers on Instagram at over $1 billion per year, with indications of significant annual growth.

Our Instagram Influencer Marketing Methodology 

In order to get an idea of how many sponsored posts are on Instagram, we tracked common sponsored hashtags, including #ad, #sponsored, #spon, and #sp. In the past year, there was an increase of 4.8 million uses of these hashtags over years prior.

The hashtags weren’t associated with sponsored posts in every instance, though.

In looking at a sample size of 500 recent posts, we found that 42% of these posts were associated with accounts were fewer than 1,000 followers. It’s unlikely that users managing these accounts are actually being paid for these posts or, if they are being paid, that there would be a significant effect on the size of the Instagram influencer market as a whole.

That leaves about 58% of the sponsored posts from accounts with more than 1,000 followers. Of the 4,792,033 posts recorded over 12 months, that amounts to 2,788,963 sponsored posts.

We then found the average follower size for accounts posting sponsored content was 32,000. Given an average $10 cost per thousand impressions (CPM), we ended up at an estimated $320 per post and an estimated total monthly spend of approximately $90 million. This would put the overall total annual spend at over $1 billion.

With the current annual growth, the market could reach a $130M/month spend by March 2018 and up to a $200M/month spend by March 2019 (nearly $2.4B spent on influencer marketing on Instagram alone).

What’s Does The Future Look Like For Instagram Influencer Marketing?

One thing is eminently clear: the Instagram influencer market is immense. There’s a billion dollar influencer marketing industry that exists within just one of the world’s most popular social media networks. Instagram giving rise to a billion dollar a year industry shows the explosive growth of the influencer marketing industry taking place on social media apps, networks, and platforms. As long as Instagram remains a discoverable place for influencers to effectively and easily create and share engaging content, the Instagram influencer market will continue to grow and evolve. And knowing the value of the Instagram influencer market is a key part of finding the pulse of the market as a whole.

Influencer marketing on Instagram isn’t without its pitfalls, though. Fake followers (that is, fake accounts created to increase another account’s followers and/or engagement) are a growing problem. They allow Instagram users to purport a higher following to brands to command higher rates for sponsorship. The result is a unique form of ad fraud within influencer marketing, a market that can attribute some of its own growth to advertisers shying away from online display advertising where ad fraud and viewability are two common issues.