Instagram Generates $20 Billion in Ad Revenue
Last year, Jefferies forecasted that Instagram would generate $14 billion in revenue in 2019, which was around 20% of how much total revenue Facebook was expected to generate. Facebook-owned Instagram has reportedly smashed the prediction having generated a whopping $20 billion in advertising revenue last year – more than a quarter of Facebook’s overall revenue – according to Bloomberg. For comparison, that tops YouTube’s annual ad sales, which Google revealed for the first time ever generated $15.1 billion and contributed roughly 10% to all Google revenue. When Facebook acquired Instagram for around $700 million, Instagram had no model for bringing in revenue. Ever since Instagram has been focusing on monetising the platform further, and similarly to Facebook, ads now appear in between user’s Stories and posts in feeds and on the Explore tab. It has given brands the ability to sell products directly from the app with its Checkout feature and has allowed creators to access Ads Manager, which uses the same tools like Facebook, to bring more transparency to branded content and better coordinate brand deals. With the platform becoming increasingly aligned with Facebook’s future as revenue from Facebook’s core business slows, advertisers continue to spend on the platform. Last year, advertisers saw four times as much engagement on Instagram compared to Facebook. “The platform continued to deliver strong results thanks to the combination of audience scale, engaging content, and advertising precision,” commented Aaron Goldman, CMO at marketing technology company 4C.