Instagram Expected to Generate 50% of Meta’s US Ad Revenue by 2025

As per estimates from research firm Emarketer, Meta Platforms Inc.’s Instagram is expected to account for nearly half of the company’s advertising revenue in the US, underscoring the app’s vital role as a key growth driver for the organization.

Instagram has gradually become an essential part of Meta’s business, not only for revenue generation but also as a platform that features Reels and Threads, directly competing with industry counterparts. In 2021, Instagram generated $32.4 billion globally, representing 27% of Meta’s total revenue. By early 2022, this figure climbed to almost 30% of Meta’s worldwide business, according to court documents released earlier this year.

Forecasts suggest that Instagram will surpass $32 billion in US advertising revenue by 2025, reflecting a more than 24% increase from this year, according to data from Emarketer. The app has over 148 million users in the United States.

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Jasmine Enberg, principal analyst at Emarketer, pointed out that Meta’s focus on video content has played a crucial role in this growth. In a blog post, she commented, “Instagram has evolved into a video-first platform, with users spending nearly two-thirds of their time on the app watching videos.”

Meta has informed investors that Instagram Reels, its short-form video feature rivaling TikTok, makes up over 50% of the total time users spend on the platform.

© 2024 Bloomberg

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