Instagram CEO Adam Mosseri Photo by Steve Jennings/Getty Images for TechCrunch

Not long after analysts from Morgan Stanley predicted India’s Ola Cabs as Uber’s biggest potential threat in the U.K. despite current competition from Bolt (formerly Taxify), analysts from the same investment bank have predicted that adding advertising to the Instagram Explore tab could add $1 billion to Facebook’s revenue by 2021. Instagram recently announced it’ll start placing ads within the Explore tab in the Instagram app for the first time. New ads will come into sight when Instagram users tap into Explore posts and scroll further for related content, while the main grid stays ad-free.

Morgan Stanley analyst Brian Nowak predicts that ads from the Explore tab could boost Facebook’s total revenue by around $1.2 billion — by 2021 — if  monetization to the tune of $2 per user can be attained and user growth rates are maintained. But there are two potential hurdles according to Nowak, the first being how quickly Facebook will roll out the new ad section and the second being  how much of the ad spend will be incremental or drawn from other Facebook ad sections.

A screenshot of the Instagram Explore tab image: Instagram

Nevertheless, the move to place ads in the Instagram Explore tab “speaks to how Facebook continues to find ways to extend its earnings runway by monetizing under-monetized engagement and usage,”, Nowak said.

Addition of Explore ads marks the latest effort by Facebook to garner more revenue from its products. One recent one was the unveiling of its digital currency, Libra. The company also has Watch, its video streaming service that Deutsche Bank analysts say could be worth $5 billion in annual revenue in the “next few years”.

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