Instagram to surpass 50% of Meta’s U.S. ad revenue in 2025
TL;DR
- For the first time, Instagram will account for over half of Meta's U.S. ad revenue.
- Instagram’s ad revenue is projected to exceed $32 billion in 2025.
- Reels and video content are key drivers, with two-thirds of users' time spent on videos.
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Instagram is forecasted to account for 50.3% of Meta Platforms' U.S. advertising revenue in 2025, according to Emarketer. This marks the first time Instagram's share surpasses half of the company's ad revenue. The platform is expected to generate $32.03 billion, a 24.4% increase from 2024.
This rise is attributed to Instagram’s focus on video-first content and features like Reels. Users are spending up to two-thirds of their time on the platform watching videos. Jasmine Enberg, principal analyst at Emarketer, highlighted this shift in a blog post, noting that Instagram has become a "video-first platform."
Instagram Reels is a major driver of this growth
Instagram’s short-form video feature, Reels, has emerged as a competitive alternative to TikTok and YouTube Shorts. Enberg said Reels is “a major driver of Instagram’s growth.” By 2025, Reels, Explore, and Threads are expected to account for 9.6% of Instagram’s ad revenue, while Feed and Stories fall to a combined 73.8%.
In 2024, Instagram Feed and Stories contributed the majority of ad revenue in 2024, at 53.7% and 24.6%, respectively. However, both shares are expected to decline as Reels and other features like Explore gain traction.
Higher revenue per user compared to competitors
Instagram’s ability to generate more revenue per user has contributed to its success. In the U.S., Instagram earns $223 per user, surpassing Facebook's $191 and TikTok's $109, per Emarketer.
TikTok ban could boost Instagram ad revenue
A potential TikTok ban in the U.S. could impact Instagram’s growth. Emarketer forecasted that if TikTok fails to win its appeal in the Supreme Court, its ban would impact the U.S. ad market. Instagram could capture over one-fifth of the $12.34 billion in ad spend reallocated from TikTok. Per Emarketer’s estimate.