Facebook is not dependent on revenue generated by Instagram but the platform does play an important role in making money for the company. According to recent report by Bloomberg, Instagram made $20 billion in 2019 from its app alone. The amount is more than the quarterly revenue of Facebook in 2019.
Instagram has found ways to incorporate ads on the platform, in between the image and videos of its users. The ads are shown in between Stories, on feed and on the Explore tab as well.
Another tech giant, Google also announced that its video platform, YouTube generated $15 billion in ad revenue in 2019, making 10 percent of the total revenue of Google. Instagram does not share its profit with creators but it pays some of the content creators for making IGTV videos. Instead of monetary benefits, it provides equipment and shoots to creators but even then the costs have not been five-figure amount.
However, YouTube shares its ad revenue with creators and according to Alphabet CFO, Ruth Porat, the cost they spend comes under the title ‘content acquisition’ which can go up to $8.5 billion.
Facebook has been trying to monetize Instagram as it built a shopping product and brands will be able to sell their products directly from the app. It is also working to be an important player in dealing with influencer’s content.
The company gave some of the creators access to Facebook product design to coordinate in brand deals and it is expected that the company will continue to develop more tools for creators. By giving metrics to brands, the company is expecting to generate more revenue.
The friendly the platform will be, the more influencers will be inclined towards it and thus, benefiting the company at the end.
Photo: AP Photo/Amr Alfiky
Read next: Facebook Welcomes Dropbox CEO, Drew Houston to the Board
Instagram has found ways to incorporate ads on the platform, in between the image and videos of its users. The ads are shown in between Stories, on feed and on the Explore tab as well.
Another tech giant, Google also announced that its video platform, YouTube generated $15 billion in ad revenue in 2019, making 10 percent of the total revenue of Google. Instagram does not share its profit with creators but it pays some of the content creators for making IGTV videos. Instead of monetary benefits, it provides equipment and shoots to creators but even then the costs have not been five-figure amount.
However, YouTube shares its ad revenue with creators and according to Alphabet CFO, Ruth Porat, the cost they spend comes under the title ‘content acquisition’ which can go up to $8.5 billion.
Facebook has been trying to monetize Instagram as it built a shopping product and brands will be able to sell their products directly from the app. It is also working to be an important player in dealing with influencer’s content.
The company gave some of the creators access to Facebook product design to coordinate in brand deals and it is expected that the company will continue to develop more tools for creators. By giving metrics to brands, the company is expecting to generate more revenue.
The friendly the platform will be, the more influencers will be inclined towards it and thus, benefiting the company at the end.
Photo: AP Photo/Amr Alfiky
Read next: Facebook Welcomes Dropbox CEO, Drew Houston to the Board
