The Facebook-owned photo sharing app has come a long way since being snapped up by Mark Zuckerberg for $1bn in 2012, a figure which surprised many at the time. Since then, the app has gone from strength to strength, reaching the 600 million user milestone in June last year.

2016 was a year of innovation for Instagram. The app added twenty new features to the platform last year, including Instagram for Business, a new feature which allows users to manage multiple accounts simultaneously.

One of Instagram’s most groundbreaking features, Instagram Stories, also launched this year which allows businesses to have unique access to customers either through promoting their products or by exhibiting behind-the-scenes footage of its day-to-day operations.

I expect 2017 to be another bumper year for innovation with Instagram marketing: here’s what to expect.

Live video will continue to dominate

Instagram was the third major social network to introduce live video, behind Facebook and Twitter. This means they’ve had a chance to iron out any problems and make the service as smooth as possible for users.

Instagram is facing some stiff competition from Snapchat: according to analytics firm App Annie, Snapchat has recently overtaken Instagram in terms of the amount of time users spend in the app.

Snapchat is proving a major rival to Instagram

Snapchat is increasingly popular in the US, with 28% of teenagers considering it the most important social network to them. Instagram hasn’t taken this competition lightly, releasing its own disappearing video functionality in November.

Expect to see more competition between these two visual social networks in 2017, as they keep up with each other’s featureset for both consumers and marketers.

Micro influencer marketing is the future, but you’ve got to choose the right celebrity

According to eMarketer, 84% of marketers said they would launch at least one influencer campaign within the next 12 months. Brands have, until now, relied on high-profile celebrities to market their products but with the rise of social media the definition of ‘celebrity’ has changed to include Instagram influencers.

In 2017 businesses will opt for relationships with Instagram influencers with fewer, more engaged, followers. For example, choosing someone based on their engagement rate, content type and posting frequency will be more effective than employing (for a very large sum of money) a fashion icon or a pop star just because they have the most followers.

Surprisingly, influencers with too many followers can actually have lower engagement levels. According to influencer marketing platform Markerly, those with between 10,000 and 100,000 followers have a like rate of 2.4%, but those with between 1 million and 10 million followers come in at just 1.7%.

With comment rates taking a similar pattern, marketers need to select influencers based on who they are, and not how many followers they have. Brands can use influencer marketing analysis tools, like Iconosquare’s new influencer search engine, to find out who is best suited for their campaign.

Not all influencers are the same

Instagram needs to cash in, but not lose its identity

The potential for Instagram as a marketing platform is huge. According to Brandwatch, nearly half (48.8%) of the world’s brands are on Instagram. In 2017, this is predicted to rise dramatically to 70.7%.

But Instagram faces a big question this year: how can it expand its advertising feature set and revenues while at the same time maintain and grow its loyal userbase? Instagram will have to balance the needs of its advertisers with the need to not be seen as having ‘sold out’ among its users.

The solution for the time being will be introducing features that help advertisers drive up conversion rates, while also being unobtrusive to users. An example of this balance is Instagram’s forthcoming purchase button feature, allowing advertisers to sell their products directly through the app.

2017 has already started on a high for Instagram, with their Stories feature hitting 150 million users and launching skippable ads. We anticipate many more new features to come this year, so marketers will need to keep their eyes peeled and keep abreast of developments to ensure that they’re targeting their prospects in the best possible way.