(Reuters) - Instagram is set to account for more than half of Meta Platforms' advertising revenue in the United States next year, as the social media platform improves monetization of its products, according to research firm Emarketer.
WHY IT'S IMPORTANT
Instagram's Reels competes with ByteDance's TikTok and YouTube Shorts, as users find short-form videos more engaging, driving marketers to adopt the format at a time when Meta is looking to boost revenue from the product by placing more ads.
CONTEXT
If a TikTok ban takes effect in the U.S., Reels and YouTube Shorts could become attractive alternatives for advertising, potentially boosting Instagram's growth.
KEY QUOTES
"Instagram is now a video-first platform, with users spending close to two-thirds of their Instagram time watching videos," Jasmine Enberg, principal analyst at Emarketer.
"If the TikTok ban is enforced in 2025, Instagram could capture over one-fifth of reallocated TikTok ad dollars in the U.S.," Enberg added.
BY THE NUMBERS
In 2024, Instagram's ad revenue primarily came from its Feed and Stories features, contributing 53.7% and 24.6%, respectively.
However, as Reels' revenue increases, the combined revenue share from Instagram Explore, Reels and potentially Threads is projected to rise to 9.6% in 2025.
GRAPHIC
(Reporting by Akash Sriram in Bengaluru; Editing by Shilpi Majumdar)
