When Facebook purchased Instagram for a hefty $1 billion back in 2012, a lot of people were wondering what exactly the social media giant was thinking.
After all, that’s a big wad of cash and Instagram was pretty much just Flickr but a smartphone app.
Yet 2019 might be the proof positive that Facebook made a wise decision in buying Instagram even if you discount the platform’s robust growth and increasing relevance to its parent company in other ways. Instagram brought in some $USD 20 billion in 2019 for Facebook in advertising revenue.
As DPReview notes, Instagram made more for Facebook than YouTube made for its parent company Alphabet. For those who have paid attention lately, Google parent Alphabet broke out YouTube’s revenue numbers for the first time recently which gave everyone a much clearer picture into how the service makes money for the core holding company.
The fact that Instagram is posting substantially higher numbers not only bears out the genius of Facebook’s 2012 purchase but also highlights just how much of a force Instagram is in digital media in general.
It also makes IGTV make a lot more sense. If Instagram is already pulling in this kind of money now then whatever they can get from YouTube’s video and streaming oriented market then those are just bonus points.
Of course, we have to note that Facebook does not break out Instagram numbers separately – all of this comes from a report by business network Bloomberg which is typically known for its accuracy in financial reporting. Given this level of impressive performance, maybe parent company Facebook will start underlining Instagram’s performance in greater detail in future disclosures.
Have you ever bought ads on Instagram for yourself or your business? What was your experience like? Tell us your story and let us know your thoughts in the comments section below.
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[DPReview]
