Instagram was started just for fun, just like other social networks, with no intention or clear visibility to make money any time in the near future. It is a photo sharing app that does just one thing, share photos in a vertical array of pictures from millions of user accounts.
This Facebook owned mobile application has been ranked as the best image sharing application in a very short period of time. Facebook, unlike with its other acquisitions, planned to build and grow this application independently. Nevertheless, Instagram’s revenue model is still connected to that of Facebook’s and all of the money is generated through advertisements. But before discussing ‘how does Instagram make money?’, let us first read about its business model.
Instagram’s business strategy is unique and evolving. Ever since its inception in 2010, the business model is quite the same — a free image sharing mobile application, but the way it uses its algorithm to monetize users’ attention has evolved over time.
Just like other social networking applications and websites like Facebook, Snapchat, Twitter etc. Instagram requires users to create a profile to connect with others. Features like photos and videos upload, photos and videos filters, following of other users’ feeds, geotagging, self disappearing stories, and live stories are provided on Instagram.
How does Instagram make money?
Instagram didn’t generate any revenue till late 2013 when it proposed revenue through advertising in its business model. It introduced sponsored post advertising (just like Facebook’s) targeting US users in November 2013 and UK users in September 2014. There was no stopping after that. Many new features were introduced, many features were copied and advertisements were included in many of them.
October 3, 2013 — Instagram Announced to add advertising to its platform.
December 12, 2013 — Introduced Direct, a feature that allows users to send photos to specific people.
August 2, 2016 — Introduced Stories, a feature copied from Snapchat, which let users upload photos and videos as their Instagram story which automatically expires after 24 hours.
November 21, 2016 — Launched live video feature which allows users to broadcast live on Instagram for up to an hour.
February 22, 2017 — Released Instagram carousel which enables users to post up to ten pictures or videos in the same post.
March 20, 2018 — Launched shopping on Instagram that made businesses to tag products on photos, making it easier for users to find, evaluate and track relevant products on Instagram.
June 21, 2018 — Launched IGTV, a mobile TV application similar to Youtube.
Most of the features Instagram provides are used by the advertisers as well. Ads on Instagram come in the form of Sponsored Posts.
If you’re willing to start your own photo sharing business — you should go with Instagram Clone which has customized features to let you roll with your own photo sharing business.