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The Instagram Technology Ecosystem
Aly Gillani | RBC Capital Markets | December 2014
| 2Introduction
ALYG
Aly Gillani
Biography
Actively Following
Vice President
RBC Capital Markets
35+
Number of Countries V...
| 3Today’s Agenda
Instagram’s Incredible Journey
Q & A
Predictions for the Future
Instagram’s Rapidly Evolving
Ecosystem
| 4
1.2B+
messages / day
11M+
matches / day
20B+
photo shares
30B+
total pins
3
6
9
12
15
'05 '06 '07 '08 '09 '10 '11 '12 ...
| 5
Jan 2011
1M
Jan 2012
~10M
Jan 2013
~100M
~200M
Jan 2014
20+ Billion
Total Photos Shared
1.6+ Billion
Likes per Day
$1+...
| 6A Powerful Platform for Celebrities & Brands…
Top 10 Celebrities (1) Top 10 Brands (1)
Name Followers
Justin Bieber 12,...
| 7
2.2M followers4.5M followers
 Emerged as a social media celebrity for postings
documenting a lifestyle of yachts, car...
| 8Instagram Adoption is Helping to Spawn a New Ecosystem
$12.4 million raised
Emerging Business Models Recent Financings
...
| 9
0
60
120
180
240
300
360
420
480
540
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 ...
| 10But How Will the Instagram Ecosystem Participate?
 Facebook Ads: App ads,
Domain ads, Event ads,
Mobile app ads, etc....
Q&A
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The Instagram Technology Ecosystem

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Platforms like Instagram, YouTube, and Vine are creating a new ecosystem of technologies, producers, and influencers as brands search for new ways to create content. Learn how this ecosystem is taking shape, the leaders, and the hot spaces to watch.

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The Instagram Technology Ecosystem

  1. 1. The Instagram Technology Ecosystem Aly Gillani | RBC Capital Markets | December 2014
  2. 2. | 2Introduction ALYG Aly Gillani Biography Actively Following Vice President RBC Capital Markets 35+ Number of Countries Visited 7+ Years of Experience Communications, Media, and Entertainment Broad Technology Coverage Ranging from Hootsuite to Celestica 53 273
  3. 3. | 3Today’s Agenda Instagram’s Incredible Journey Q & A Predictions for the Future Instagram’s Rapidly Evolving Ecosystem
  4. 4. | 4 1.2B+ messages / day 11M+ matches / day 20B+ photo shares 30B+ total pins 3 6 9 12 15 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 Zetabytes(ZB) 50B+ messages / day >4ZB (+50% Y/Y) 13ZB (+40% Y/Y) Macro Trends Driving Innovation and New Internet Leadership “SoLoMo” Growth of Digital Universe (1) (1) 1 petabyte = 1MM gigabytes; 1 zetabyte = 1MM petabytes 2/3 of today’s content is consumed / created by consumers (Video Watching, Social Media Usage, Image Sharing etc.) Consumers care about getting nearby info on demand, wherever they might be located
  5. 5. | 5 Jan 2011 1M Jan 2012 ~10M Jan 2013 ~100M ~200M Jan 2014 20+ Billion Total Photos Shared 1.6+ Billion Likes per Day $1+ Billion Acquisition Price by Facebook 75+ Million Daily Average Users 60+ Million Photos Shared per Day 13%+ Internet User Penetration Instagram: A Silicon Valley Fairy Tale Explosive Growth in Monthly Active Users Amazing Instagram Statistics ~300M Jan 2015E
  6. 6. | 6A Powerful Platform for Celebrities & Brands… Top 10 Celebrities (1) Top 10 Brands (1) Name Followers Justin Bieber 12,389,220 Kim Kardashian 12,108,550 Rihanna 10,960,798 Beyonce 8,872,333 Ariana Grande 8,393,735 Miley Cyrus 8,155,288 Kendall Jenner 8,112,323 Taylor Swift 7,412,308 Khloe Kardashian 7,410,566 Kylie Jenner 6,932,381 Name Followers National Geo. 9,284,462 Nike 8,182,675 9GAG 7,788,665 The Ellen Show 7,248,815 Victoria’s Secret 6,481,173 Forever 21 5,402,717 H&M 4,378,497 NBA 4,099,931 GoPro 3,551,279 Starbucks 3,497,664 (1) As of November 2014
  7. 7. | 7 2.2M followers4.5M followers  Emerged as a social media celebrity for postings documenting a lifestyle of yachts, cars and clubs  Antics have helped him attract millions of followers  Recently profiled in Wall Street Journal  Monetizing Instagram through product placement and sponsorships  Known for strolling the streets, taking people’s pictures and interviewing them about their lives  Posts the portraits and captions on the Humans of New York blog, on Instagram and on Facebook  Profiled in New York Times, Time, Huffington Post  Documenting street life near dangerous areas and war zones on a 50-day UN-sponsored tour  Using Instagram to promote books / brand ...and Individuals Case Study: Dan Bilzerian Case Study: Humans of New York
  8. 8. | 8Instagram Adoption is Helping to Spawn a New Ecosystem $12.4 million raised Emerging Business Models Recent Financings $11.2 million raised $29 million raised
  9. 9. | 9 0 60 120 180 240 300 360 420 480 540 $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Volume(MM)) SharePrice(US$) Facebook’s Million Dollar Question: Monetizing Instagram Trading Performance – IPO to present Still Several Growth Levers to Pull (1)  Successful shift from desktop to mobile  Continued user adoption / engagement  Attractive financial profile (top line growth and margins)  Best in class executive leadership Monetizing Instagram Key Factors Driving Recent Performance  ~300M MAUs by end of 2014 and ~350MM-410M MAUs by end of 2015  ARPMAU(2) at a range to drive potential revenue of $1.3BN - $2.1BN of incremental revenue in 2015 Autoplay Video Ads  Most recent example: ALS Ice Bucket Challenge  Potential for $700M - $2.0BN incremental 2015 revenue Facebook Audience Network (FAN)  Enables marketers to target mobile app user audience away from Facebook’s own site  Potential for $300M - $400M of 2015 revenue (1) RBC Capital Markets Estimates. (2) Ad revenue per monthly average user Monetizing WhatsApp  600M MAUs – 100% YoY growth  Potential for $400M - $500M incremental 2015 revenue 1 2 3 4
  10. 10. | 10But How Will the Instagram Ecosystem Participate?  Facebook Ads: App ads, Domain ads, Event ads, Mobile app ads, etc.  Sponsored Stories: Page post, page/place, Event RSVP, App, Game Played, etc.  Other: Revenue Share, Retargeting, Data, etc.  Revenue Share: 30% split w/ App Developers (i.e. – Zynga)  Display Advertising: Standard Banner Ads, In- Video Overlay Ads  In-Stream Advertising: Pre-roll, In-Slate  Other: Data (Targeting), Retargeting, Channels  Revenue Share: 45% split w/ Creators (i.e. – Maker Studios)  Display Advertising: Promoted Pins  Other: Affiliate, Data (Targeting) Evaluating Current Advertising Models of Other Social Platforms
  11. 11. Q&A

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