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Can Facebook’s Instagram Continue to Grow despite Competition?

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Facebook’s Instagram is the second most popular app

In the previous part of this series, we discussed how Facebook’s (FB) Instagram has grown at a rapid rate and is emerging as a preferred choice for advertisers. But Instagram has slipped to the number two position as the “most important social network” among teens in the US.

According to a survey of 6,500 US teenagers conducted by Piper Jaffray this year, Snapchat, Instagram, Twitter (TWTR), and Facebook were the four most popular social networks among teenagers. Yahoo’s (YHOO) Tumblr, Pinterest, and Google’s (GOOG) Google+ remained at the bottom. Instagram topped the chart in the previous survey. However, this year, Snapchat took over the title.

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Should advertisers be cautious about Instagram?

Despite a fall in its popularity, Instagram is still growing its user base and engagement at a rapid pace and is immensely popular among teenagers. However, the perception change among users is a matter of concern.

We believe Instagram will witness an increase in the user base, as the app is growing fast in countries like Brazil (EWZ), Japan, and Indonesia. Plus, the Asia-Pacific region could be another area of focus for Facebook in growing its Instagram business, as Facebook has seen tremendous growth in active users in this region.

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