Techmoran

Instagram Generated $20 Billion in Ad Revenue in 2019


Instagram brought in about $20 billion in advertising revenue for the 2019 financial year contributing to more than a quarter of Facebook’s income.

As reported on Bloomberg, the amount generated by Instagram has generated over $5 billion more than what Google’s App youTube generated in the same financial year.

The amount was brought about by Ads shown up on Instagram in between Stories, within the feed, and on the Explore tab.

The company started monetizing the app in 2015 after the acquisition. The team has increasingly been figuring out how to wedge ads between users’ content.

According to critics from users on the revenue amounts. Some users have disputed that the high amounts are due to Instagram not paying producers.

YouTube, on the other hand, shares ad revenue with creators thus leading to low revenues.

According to Alphabet CFO Ruth Porat, as reported to the verge.com. She told investors yesterday that creator costs go under YouTube’s “content acquisition” costs, which run around $8.5 billion.

However, some content creators on Instagram’s IGTV have reportedly earned for the shoots and content creation.

Facebook has as well focused greatly on monetizing Instagram.the company has gone as far as building a shopping product that gives brands the ability to sell items directly from the app. It has also set itself up to play a larger role in influencers’ content deals.

It recently gave some creators access to a Facebook product designed to help coordinate brand deals. Presumably, the company will continue to expand its tools for creators and give brands access to metrics. It is likely to generate more money for the company.

However, the 2020 revenue statistics might be quite unpredictable. Google has recently introduced a new video-sharing application Tangi which works similar to IGTV, TikTok and Byte which now comes in as a direct competitor.

Tangi allows you to post your videoes in different categories for everything from crafting to makeup to cooking. And there’s a “Try It” feature so users can recreate and share a tutorial.

Depending on the reception of the app by the users. There are high chances that the revenues will spur divided revenue allocations for the apps.

Another thing is that  Instagram is also dropping the  IGTV button after claims that there are only a few users click to it. Most people have been finding IGTV content through previews in Feed. Other sources include the IGTV channel in Explore, creators’ profiles and the standalone app.

This could hugely affect the revenue earnings for the 2020 financial year.

 


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