With every year that passes, Facebook’s 2012 acquisition of Instagram for a billion bucks looks like an even bigger bargain — especially when you consider the kind of cash the photo app is raking in for its parent company.
Instagram pulled in around $ 20 billion in ad revenue in 2019, according to Bloomberg sources claiming to have knowledge of the matter. That’s an impressive sum whichever way you look at it; in fact, it’s more than a quarter of Facebook’s entire revenue last year, and also $ 5 billion more than Google-owned YouTube generated via ads in 2019.
Facebook declines to reveal Instagram revenue in its earnings reports, choosing instead to bring its figures together from all of its apps, which beside Instagram also include Messenger and WhatsApp. The social networking giant emphasized its “family of apps” last year when it added “from Facebook” to the opening screen of Instagram and WhatsApp as part of a rebranding exercise.
It took Facebook three years to launch ads in Instagram, with the first ones landing in 2015. Since then, it hasn’t looked back.
If you’re one of the billion-plus people that use Instagram, perhaps you’re not particularly surprised that the app is generating so much cash for its owner. After all, every time you open it, there are plenty of ads waiting for you in your feed, as well as in the app’s Stories and Explore features. And last year we heard about how in 2018 Facebook had reportedly ordered Instagram to double — yes, double — the number of ads on the platform.
It can be a tricky affair incorporating ads into an app like Instagram. Include too many and you risk upsetting the community; too few and it’s lost revenue for the company, with brands spending part of their ad budgets on other popular platforms instead.
But plenty of Instagrammers appear to be happily spending some of their own hard-earned money on stuff they see in ads. A 2019 survey of people who use Instagram revealed that around a third of them had bought something directly from an Instagram ad. With engagement like that, we can expect to see Instagram pulling in even more ad revenue in the years to come.