Instagram Business Model: How Instagram makes money?

How Instagram makes money

If you have ever used social media websites then you must have wondered how they make money. There must be some way that they earn money and put all the new features into these websites. People don’t often realize that these companies get rich through various campaigns and ads on their websites. Let us find out more in this post about How Instagram makes money

Ipsos, a market research company, did a survey recently and found that about 66% of people use Instagram to interact with various brands. A lot of people want to interact with brands but don’t get an opportunity to do so in their daily life. Instagram allows people to directly put up their queries with people and get fast responses. Instagram also makes use of this interaction to earn money through advertisements and sales.


Advertisement is a major source that social networking sites use to earn money. Instagram is no different. It too uses ads to earn money. Instagram advertisements can cost anywhere from $0.20 to $6.70. Additionally, for cost per click (CPC) ads, advertisers pay $0.60 to up to $2 per click. For cost per mille (CPM) or cost per thousand impressions also, advertisers pay up to $6.70.

Furthermore, Instagram is filled with people who use it for promotion almost daily. These ads are posted on Instagram’s pages in the following manners.

Instagram ads are paid and casually show up in newsfeeds and stories. Instagram advertisements are, therefore, focused on individuals well on the way to be keen on your items or administrations. Hence, these advertisements are intended to mix in flawlessly to where clients scarcely remember them as promotions.

You will find ads on Instagram in the following formats:


Organisations also regularly update and put up their stories on Instagram. The story is a special feature of Instagram where people update the highlights or the best moments of their day. Sometimes, people do check out these highlights and form their opinions. Therefore, the more interesting these stories are, the better it is for the brand as interesting stories will attract more people.


Whether pics or videos, advertisers can choose either way to market their products to the people. Videos make the ads more attractive and give enough information to help people decide if they want the product or not.


These ads are a lot like slide shows. These slide shows allow users to learn about the product in a single swipe.


How Instagram makes money

How Instagram makes money

Instagram is a popular social networking website which is known all over the world. People use it to share photos and videos. It also provides users with features like filter, captions etc. to edit their posts and make them more interesting and appealing.

Instagram started as a fun website and after it got bought by Facebook, it adopted its business model of earning money through advertisements. Facebook understood Instagram’s importance and how much potential it has to earn money. This made Facebook buy Instagram. It also reduced competition for Facebook.

Instagram’s business model focuses on people of all age carrying smartphones and allowing them to share and explore various posts. Since it is famous all across the globe; it allows businesses to market their products and gets access to everyone across the globe. The business model allows marketers to increase their client base. It uses AI to always show people posts and advertisements based on their search history. This forces people to spend a bit longer time than they normally would.

Their business model is basically to make it easy for advertisers to use their platform and reach the maximum amount of people. It keeps these ads relevant by using its advanced AI to always show ads to people depending on their search results. The model allows people from all walks of life to post their ads and start earning money. It is a great platform for small and a big business equally as it reaches millions of people every day.

Conclusion: How Instagram makes money

Similarly, like other large names in online media, Instagram started as a pleasant thought without a reasonable method to bring in cash. Like its parent association, Facebook, advertising has transformed it into a cash-making model. Since it is a photograph sharing application, it is a great platform for various brands all around.

Clearly, Instagram’s business model has revolutionised the social media marketing agency. It has given a stage for all businesses regardless of their size. Instagram today reaches more people than newspapers. This makes it a perfect place to advertise and these ads in return bring money to Instagram.