Have you ever asked yourself, how does Instagram make money? Despite making the app accessible for everybody to use, how do they make money to keep the app running?
One of the social media apps that need no introduction is Instagram.
Instagram has millions of users daily. Apart from ordinary users, some brands and businesses advertise their products and services on the app.
This has created an avenue for people on Instagram to make money by advertising the products sold by these brands and businesses.
There are people known as influencers on Instagram who make money by advertising the products and services offered by these brands and businesses.
However, most people do not know how Instagram itself makes its money.
We know how the influencers make their money on the site and how the site itself produces its own money.
We will be getting to know that very soon. Let us first look at a bit of history.
What Is Instagram?
Instagram is a social media site that was unveiled in 2010. Its primary focus was the sharing of photos and short videos.
Users on Instagram can also snap pictures with the app to post apart from importing them from their galleries. Users can also chat with other users on the app, just like Facebook messenger.
They can also comment, like, and report photos other users post. Instagram users can also save photos and videos they like to view later.
Instagram is used by both individuals and brands who advertise and conduct business on the site. Users on Instagram will have to create an account before beginning using the app.
You could create an account by linking the app to your Facebook account, in which case you would not need to input a password.
All you would need is to have your Facebook account already opened on the same device you are opening the Instagram on.
Facebook then purchased the company for $1 billion in 2014. Facebook developed Instagram as a separate company.
The Instagram revenue model can be likened to Facebook, which is now known as Meta.
This was around when Facebook was trying to buy out almost every company that was a potential threat to its survival in the long run.
How Instagram Makes Money
Users of Instagram are known to spend at least 30 minutes in the app whenever they visit it.
Many people have also revealed that they usually visit the app whenever they look for a new product to buy. Due to this, Instagram has devised several ways to generate its revenue.
Let us look at some of the apps used to make money.
Advertising
Like Facebook, advertising is one of the ways Instagram makes it money.
Instagram makes the majority of its revenue from advertisements, and it makes up about 40% of the total income of Instagram.
Now take into account that more than 2 million advertisers operate on Instagram daily.
Story Ads
Just the same as advertisements. However, these ads are put on stories of individuals and businesses in a slideshow form.
These get destroyed about a period of 24 hours has passed. The story ad can appear between two-story slides as you view the story, and Instagram gets paid for this.
Photo Ad
These are similar to the stock photos posted by users on the app. However, these have tags and a call to action button that you can use to access the advertised product or service.
Carousel Ads
These are an extension to traditional ads that a user can swipe to see more photos or videos in the same single ad.
Explore Ads
More ads again. When users go to ‘explore’ to look for new content, there are ads there that they will come across.
Explore is where you see posts from users you are not following according to the kind of followers you follow.
It is designed to bring to you users you may like to follow since they post the kind of things you like
Conclusion
So this is how the social media site Instagram makes its money. As you can see, almost everything seems to be about the placement of ads because Instagram is where users are always viewing things.
So if you have been looking to find out how Instagram makes its revenue, I am sure that this article has answered your question todaySince you now know of Instagram, you can also check out how WhatsApp also makes money.
