Where Does Instagram Make Its Money?

When you think about social media, you may also wonder where the money to run those platforms comes from. Someone has to be paid to design and maintain these websites, and Instagram is no different. Facebook, the leading site in social media, bought Instagram in the April of 2012. This was a business move that was widely criticized by many, as Instagram had no real revenue at the time. Like Facebook, Instagram allows for paid advertising to happen, and that is where the majority of the income originates from.

The selling point for Instagram that won Facebook, and everyone else, over was the mobile designated design. The world has shifted into using their mobile devices almost solely, and using social media on computers is no longer taking place as much as it once had. One of the drawbacks that Facebook faced for a long time was how accommodating they were to PC users, but not as mobile friendly. The purchase of Instagram has given them the chance to really capitalize on the mobile world. Instagram has been catering to its mobile users since it was founded and will continue to do so in a smartphone powered society.

Looking at the profits Instagram makes, it’s not much compared to other social media sites. Instagram has stated that they are taking things slow to make sure everything is done right and they don’t risk the quality of the app in favor of a higher profit. They’ve slowly opened advertising beyond just a few big names, and are waiting before expanding that move.

Still, even with the small amount of paid advertising they’re experimenting with, Instagram manages to pull in a surprising amount of profit for how little they’ve been working on it. In 2015, it was estimated that Instagram was worth $33 billion. It is safe to assume that they’ve increased that amount, and the same article goes on to talk about how they predict that by 2020, the website will have made over $5 million in revenue.

Many businesses are using Instagram to grow and boost the traffic to their brand. Because of this, Instagram has thrown open the doors to making a profit off of paid advertising, as Facebook has been successful with doing. When it was born, Instagram wasn’t an app that had a clear plan for profit, like most fun, social-based mobile apps. To watch as it evolves and adds more interactive features like live video and stories is an amazing thing to witness, and businesses are eager to hop on the bandwagon. Instagram has proven to sell, and tapping into that resource could result in millions of dollars being made for those behind the app.

The more people who sign up and begin actively using Instagram will help make more speculations at how much the website will be making in the upcoming years. Instagram has been steadily growing in users, and that is unlikely to stop anytime soon. As long as people are double-tapping, there will be money to be made!