How does Instagram Make Money? (2024 Guide)

It is 2021, and we all know what Instagram is and we all use it daily. Now that we have learned about Instagram and how it works, you may be wondering if the platform is going to cost you anything or how the company generates revenue, and how does Instagram make money.

obviously, Instagram should have something in mind for making money of its 1 billion scrolling users who can be like a gold mine!

In this blog, we will answer these question and provide you for the information you are looking for and talk about the Instagram worth.

How much is Instagram worth?

The Instagram net worth, as of 2021, is more than 100$ billion! With an estimated value of $102 billion, Instagram is worth 5x as much as Snapchat and 6x as much as Twitter.

Using Instagram is totally free for users. Yes. It is free. Or at least you don’t have to pay cash to install the app; you can use any of its features without paying anything. One of the reasons why Instagram is so popular is because it’s free to use. Instagram has another way of making money.

How does Instagram make money?

Most of the Instagram revenue is through advertising. You might sometimes notice “sponsored” posts or stories on your Instagram feed, even if you aren’t following the company that authored the post. Brands pay to put sponsored posts and stories on Instagram users’ feeds to advertise their products or their business in general. So, advertisement is one of the biggest factors on the Instagram worth. 

There are several sections on Instagram for advertising which is the answer to how does Instagram make money.

Below are different kinds of Instagram ads:

• Story Ads: The ads that pop up in between two story slides.
• Photo Ads: Normal posts on the platform but with a sponsored tag.
• Video Ads: Normal video posts on the platform but with a sponsored tag.
• Carousel Ads: Multiple ads in which the user can swipe to see additional photos or videos in a single ad.
• Collection Ads: The collection ads include swipeable carousel display of product images.
• Ads In Explore: The ads that are displayed in users’ explore page.
• IGTV Ads: The ads that are displayed in users’ explore page.

How does Instagram’s advertising work?

Instagram allows companies, brands, and businesses to pay for advertisements within the app. These ads will display in your Instagram feed along with posts from Instagram users you follow. Since Instagram has over 1 billion users, it’s an excellent platform for companies to advertise on if they want to achieve exposure.

There was this one time that Instagram’s terms of service were changed so that they could sell users’ posts to advertisers as they saw fit – without compensating them. Many users were not happy with that and complained. Instagram has since removed that policy, and reassured Instagram users that they hold the rights to their content.

Now, Instagram’s terms of service state that:

“ Instagram does not claim ownership of any Content that you post on or through the Service. Instead, you at this moment grant to Instagram a non-exclusive, fully paid and royalty-free, transferable, sub-licensable, worldwide license to use the Content that you post on or through the Service, subject to the Service’s Privacy Policy…”

Okay, so the company can’t do anything with your data outside of what its Privacy Policy says. They won’t sell your data to other companies.

They might share some of your data with companies that legally affiliate with Instagram (also their parent company, Facebook), but they will value your choice if you choose to make your Instagram posts private.

They may share some information with sponsors and advertisers so they can show you more ads that actually pertain to/interest you. They may only share parts of your data that are anonymous so that it doesn’t link back to your account.

So, Instagram would not sell any of your information to advertisers that could identify you on its own to make money. Still, they may sell anonymous data about how you use the platform, such as who you follow or comment on, or your location. Advertisers may use this data to display ads to you on Instagram that will match your location or interests.

The growth of Advertising: Facebook vs. Instagram

That’s it. You now know how much is Instagram worth, Instagram’s net worth and everything about how does Instagram make money. Using this information, you can easily start using Instagram as your own marketing platform to make more money.