Tech companies like Google and Facebook make a bulk of their revenue from ads. They have been so good at turning their various assets into cash cows. We have always known how much revenue they earn from their quarterly statements. However it is rare to see them releasing granular statements of how their assets are performing.
We know Instagram is an important cash cow for Facebook but we haven’t known how much revenue it rakes for the company.
Well Bloomberg reports that Instagram brought an insane $20 billion in advertising revenue in 2019 for Facebook. Facebook raked in $70.7 billion last year which means Instagram was responsible for 28% of the revenue.
The insane thing is that Instagram managed to generate more money from ads than YouTube. Google revealed that YouTube generated $15 billion from ads alone. It is more impressive if you consider the fact that YouTube has 2 billion monthly active users and Instagram is over half that.
That is pretty substantial for a social network they bought for a “mere” $1 billion in 2012. Facebook has managed to turn an app that people loved for its filters into a proper cash cow thanks to ads on the feed and on Stories. Over the past few years, they have also added an ad framework, insights and more tools to enable people spend more money on the app.
Instagram has consistently shown that it is one of Facebook’s most vital assets and it will continue being that way till we reach a point where everyone is connected to the web. A unit that could rival Instagram’s revenue is WhatsApp but they are still yet to monetize that platform fully.