UPDATED 21:12 EST / FEBRUARY 04 2020

APPS

Report: Instagram brought in $20B in advertising revenue in 2019

Instagram continues to go from strength to strength for parent company Facebook Inc. as a report today said the photo-sharing app brought in $20 billion in advertising revenue in 2019 — more than a quarter of Facebook’s overall revenue for the year.

The claim comes via people familiar with the matter reported by Bloomberg, which noted that Instagram has become increasingly central to Facebook’s future. Users and advertisers continue to flock to the app even while sales and revenue growth at the social networking giant slow. Facebook delivered its quarterly financials Jan. 29, beating market expectations on key metrics but otherwise disappointing investors with higher-than-expected costs.

Facebook acquired Instagram back in 2012 for $1 billion, causing argument at the time as to whether the money would ever be recouped. Instagram had no monetization at the time, driving much of the skepticism, but seven years later, it’s apparent it was a bargain.

The Instagram revenue figures, while not coming directly from Facebook, contrast directly to ad revenue figures for the Google LLC-owned YouTube. Parent company Alphabet Inc. provided numbers for the video service in its financials Feb. 3, the first time it has provided specific figures for YouTube. Ads on the service generated $15.15 billion in fiscal 2019, up from $11.16 billion in 2018.

The figures do not include non-advertising revenue such as subscriptions to YouTube TV, which are included in Google’s “other revenue” segment. Google Chief Financial Officer Ruth Porat disclosed in an investor call that non-advertising revenue on YouTube reached a $3 billion run rate in the fourth quarter.

Google did point out that the majority of the ad revenue it raises on YouTube is paid out to creators, with Porat saying that the company paid $8 billion to those who make videos for the site. Instagram, by contrast, doesn’t pay out any of the ad revenue it earns to creators directly. The only way Instagrammers can make money is to partner with companies directly.

Photo: PeakPX

A message from John Furrier, co-founder of SiliconANGLE:

Your vote of support is important to us and it helps us keep the content FREE.

One click below supports our mission to provide free, deep, and relevant content.  

Join our community on YouTube

Join the community that includes more than 15,000 #CubeAlumni experts, including Amazon.com CEO Andy Jassy, Dell Technologies founder and CEO Michael Dell, Intel CEO Pat Gelsinger, and many more luminaries and experts.

“TheCUBE is an important partner to the industry. You guys really are a part of our events and we really appreciate you coming and I know people appreciate the content you create as well” – Andy Jassy

THANK YOU