How does Instagram make money?
“Like all the social media platforms”
Instagram earns money from advertisements. That's the only way you can earn money from social media platforms. Unless you charge fees to be in them or charge for some extra features.
I have been creating ads on Instagram from past 1 year now. Businesses pay money to get their content featured on the platform. Which can be in the form of an Instagram Feed, Story or both. These are all the videos and images which you see with sponsored titled on them.
It's been speculated that Instagram may start charging for shopping feature. But as of now, all the features on Instagram are free to use.
They only charge from people who want to advertise their content and broadcast it to a large number of people.
Think of it as TV ads but more targeted you can select the demographic based on the interested of people.
When Facebook bought Instagram, Instagram didn’t make any money, however, it had one thing: Attention.
Eventually, Facebook introduced ads on Instagram, and this is what Instagram makes money from today. Ads. The clever move by Facebook is that they used the same ad manager for ads on Instagram as they already used, which firstly meant that they had a ton of information about their users that were now using Instagram, allowing brands to target individuals with their ads better, but more importantly, it was easier for Facebook to make marketers who were already marketing on Facebook to start using Instagram ads, as the transition was effortlessly, and marketers didn’t need to learn a new ad manager from scratch again, allowing Instagram ads to quickly gain traction and start making money.
Hope it helps!
Like many have answered before, they offer others to advertise on their platform and leverage the reach that they have, much like Facebook has done. While they don’t have as much emphasis on advertising as Facebook does for brands and businesses, we can assume that since Facebook is their parent company, we will start to see more emphasis on advertising and less organic reach on Instagram (at least the business pages) much like we saw on Facebook. This will almost force businesses to advertise in order to start reaching people, increasing Instagram’s profits.
I don't believe they are earning any revenue. They are running off venture capital funding.
I think they will do one of the following:
- Never make money and continue to operate until another company buys them.
- Start showing advertisements
- Offer some kind of pro or business features for a fee.
In the meantime, I make money printing Instagram photos for people!