- Instagram accounts for $20 billion in ad revenue, which accounts for more than a quarter of Facebook’s total revenue for 2019.
Instagram is not Facebook’s main moneymaker, but it definitely plays a big part in generating revenue for the social media company. Bloomberg reports today that last year’s update took in $20 billion in advertising revenue, which accounts for more than a quarter of Facebook’s total revenue for 2019.
Ads appear between Stories, within the list, and on the Explore tab on Instagram. The team at Instagram has gradually worked out how to wedge advertising between the content of users.
This sales figure is particularly interesting considering Google’s admission yesterday that YouTube generated last year $15 billion in ad revenue or about 10 percent of overall revenue from Google.
Instagram does not share any of its ad revenue with makers, as opposed to YouTube. Instagram pays for its IGTV ads to certain creators, though in that case, the company pays for the equipment and shoots of the creators rather than sharing ad income. Usually, those costs did not even touch the five-figure mark, Instagram said. On the other hand, YouTube shares ad revenue with creators, and Alphabet CFO Ruth Porat told investors yesterday that creator costs go under the expense of “content creation” of YouTube, which sits at around $8.5bn.
Facebook focussed on Instagram monetization. It’s developed a shopping platform that allows brands the ability to sell items directly from the app and is also set up to play a greater role in content deals for influencers. It recently gave some creators access to a Facebook app designed to help manage brand deals, and the company will probably continue to expand its creator tools and give marketers access to metrics that will likely generate more money for the company.
Menlo Park, California-based Facebook, the biggest social media company in the world, is reportedly under US antitrust investigation. Justice Department, Federal Trade Commission, and state attorneys general. The significant contribution of Instagram to the overall sales of the business can help explain why U.S. Chief Executive Officer Mark Zuckerberg objected to demands to break up Facebook. Senator Elizabeth Warren, and other Democratic presidential contenders.
Recently, Instagram added a new feature called Reels in an attempt to steal the crown of the best producer of viral content. The video tool allows users to create short 15-second clips that can be uploaded to their stories with music and everything.