We already knew that Instagram is a giant app that makes up a significant chunk of Meta’s overall business.But now we know just how big it truly is, courtesy of a new court filing: In 2021, the photo and video app generated $32.4 billion in ad revenue — that’s 27% of Meta’s overall revenue.More context: Instagram made more money selling ads that year than Google’s YouTube, which generated $28.8 billion in ad revenue. (Analysts at MoffettNathanson peg YouTube’s overall revenue for that year at $35.4 billion, after factoring in the money it makes from its music and TV subscription services.)
And remember that unlike YouTube, which gives up 55% of every ad dollar it generates to content owners who upload videos to the site, Instagram (and most other social apps) spends much, much less. It still expects most users to give it photos and videos for free.The Instagram revenue numbers come out of a filing Meta made this week, in an attempt to get a judge to dismiss a federal antitrust suit.We have no idea if that legal maneuver will be successful. But the documents do an excellent job of showing how fast Instagram has grown under Meta’s ownership. Recall that Meta — then Facebook — paid $1 billion for Instagram back in 2012, when it was a revenue-free photo-sharing startup with a handful of employees. It’s now run by former Facebook product executive Adam Mosseri.From the filing: “Instagram generated advertising revenues of $11.3 billion in 2018, $17.9 billion in 2019, $22 billion in 2020, $32.4 billion in 2021, and $16.5 billion in the first half of 2022.” Zoom!One last thing: Last month we noted that analysts now suggest that YouTube could be worth $400 billion. These new numbers suggest that Instagram could very well be worth something similar.One crude way of getting there would be to assume that Instagram’s growth spurt has continued, and that it now accounts for something close to a third of Meta’s overall revenue. If we apply that ratio to the company’s current market cap of $1.34 trillion, that gets us to $440 billion. Maybe worth thinking about the next time you post a photo.
