Being an images and short videos sharing platform, Instagram is one of today’s most used social networks. But this was not the case when it was bought by Facebook in 2012.
Why did Mark Zuckerberg’s company make that decision? Based on how Instagram makes money today, it was a great idea, and now we will tell you why.
In pochi punti:
How Instagram works
Instagram was born in 2010 as a new social media based on visuals. Users can share images and short videos, arrange them with tags, like and comment other people’s content.
At the beginning, this was a rather modest company. Instagram had just 13 workers when Facebook bought it. So why did social media mogul Mark Zuckerberg want it? Because of how Instagram works.
Facebook’s founder immediately realized this could be the future obsession for many internet users. And that proved to be true. Right now, Instagram has more than 1 billion active users.
Why is it so beloved?
People love Instagram because it’s an easy platform to navigate. You just log in, add your friends, choose celebrities you want to follow. Also, gaining a good audience is pretty simple.
In fact, you need to have a great sense of style and easthetic and an engaging tone of voice. That’s it. This way you can get more and more followers and create a virtual community.
This is why so many social media influencers start from here. How Instagram makes money is in direct link with how its most influential users do.
How Instagram makes money: the power of adv
Advertising and sponsored posts are the main ways for Instagram to make money. Now that you know how Instagram works, it’s easy to understand its appeal.
Young people and social addicted love to mindlessly scroll through their feed. First thing in the morning, it’s almost a mechanical gesture to open Instagram and see what’s up. That’s why companies and brands continue to invest on sponsored posts, stories and such.
For example, when scrolling through their feed, users see a beautiful picture of a dress and leave a little heart on it. Then they will be inspired to click on the profile, explore it and even buy that dress. This all happens almost without thinking about it.
Emotions and instinct
Some people say images speak louder than words. And that’s true, in some cases at least. For instance on Instagram they are the main focus of the platform.
A smart, beautiful, visually stunning image is bound to attract a lot of conversions. More than a good piece of writing. That happens because Instagram is a visual, emotional platform. You see an image, your senses are drawn to it and the rest happens in a split second.
That’s how companies make money on Instagram. And of course, that’s how Instagram makes money too.
Social media marketing is one of the most tools of digital advertising. Here are some of its benefits:
- Through mobile marketing, you can reach people anywhere at any time.
- A great segmentation and targetization system helps you to send the message to the right people.
- Beautiful images and smart, short copies are best received on fast-moving devices such as smartphones and tablets.
But what’s maybe more important is the storytelling approach to brand identity on social media.
How Instagram works well with storytelling
Instagram allows you to send short, pointed messages to people all around the world. A captivating image, a funny mini-video and a couple of well-written captions are enough to attract a potential customer.
But a brand doesn’t want to just acquire customers: it wants to create a community. And that is easy on Instagram. Through images, videos and interactive stories, users learn more and more about a brand, a company, an influencer.
So they become invested in those stories and want to know more about it. They want to be involved in the story, to be engaged. And Instagram is the perfect place to do that.
So, how does Instagram make money?
Brands are more likely to invest in social media marketing on a platform like this for several reasons.
First of all, it attracts a specific kind of people. Young people, especially Millennials, are in love with Instagram and its many features. So companies aimed at them are likely to use the platform for their marketing campaigns.
Moreover, Instagram is extremely flexible and constantly changing. New features are added to the social network to make it even more engaging. For instance, the adding of Stories (short videos that dissappear after 24 hours) has been a huge success in the last years.
Same goes for reels, IGTV which allows for longer videos, and most recently Reels. Investors on Instagram can choose between several options for their advertising. This way they’ll surely find a good format for their content.
The trend for Instagram advertising
Marketing reserchers found out that advertising spending on Instagram grew 177% for the year ending in the second quarter of 2018. At the same time, ad impressions grew by 209%.
This is in direct contrast with Facebook revenues, which are growing more slowly or not growing at all. Because more and more people spend time on their phones and life is getting faster, an all-visual platform like Instagram is likely to be more profitable in the following years.
So, brands and companies all over the world will spend more and more on Instagram sponsored posts over other platforms. Even the most recent ones like Tik Tok or Clubhouse are still too niche to get its enormous audience.
Through the alliance between Instagram and Facebook, Mark Zuckerberg and his company are dominating the social network world.
And this is how Instagram makes money. With a specific and efficient business model that gives Zuckerberg the largest piece of the cake in terms of social media advertising.
Are things going to change?
We don’t know for sure, but the trend is pretty easy to read. Instagram is going to grow a lot more at the expense of Facebook and Twitter.
At the same time, the platform is slowly evolving. Images and videos are still the main focus, but a well written caption is required as well. Most of all, Instagram calls for interaction with the users.
That makes it a perfect community-creation platform where people talk about their interests and feel free to participate in conversations. And that will probably attract more advertising and more conversions. So no, we don’t think Instagram is going to lose its record of revenues anytime soon.
In conclusion
How Instagram makes money is clear: through advertising. In order to be more and more efficient, your social media strategy can’t leave this platform out.
In the News and Tips section, Mailsenpai’s social media experts and markering professional will tell you everything you need to know about it.
