Business Model of Instagram – How Does Instagram Make Money ?

This Article Focuses on the Business Model of Instagram. Instagram was launched in October 2010, Facebook Instagram is a social networking platform for sharing photos and videos. The business Model of Instagram allows users to upload images and videos which can also be uploaded through different filters, organized using tags, location data, etc.

business model of instagram - 1

In this post, we will dig deeply into Business Model of Instagram and explain how this Social Media Site is increasing its reach and relevance in the field of online marketing and advertisement. We’ll also find out how Instagram makes money by using its revenue sources. So, let ‘s start unraveling the mystery right away –

Introduction to Business Model of Instagram

Created by Kevin Systrom and Mike Krieger, Instagram is a giant in online social networking. Okay, it wasn’t supposed to be a giant when it started. It was made out of a lot of fun without any intention to make money. It only allowed one thing, i.e., to allow users to click and share pictures.

Now, it’s a go-to platform for over 1 billion users not only to share videos and images but also to advertise their goods and services to brands.

In this post, we’ll look at Business Model of Instagram to see how the fun-filled app became a $100 billion business.

Business Model of Instagram: How does Instagram work?

Instagram is a social networking program that allows users to post videos and photographs from their lives. An individual can use such a wide range of features that it is enough to overwhelm himself and his followers.

Main activities undertaken by the Business Model of Instagram include improving user experience as users use the Instagram app, increasing and maintaining the user base, and providing customized advertisement services.

business model of instagram - 2

The business model of Instagram is focused on the number of tools and services it provides.

Let us look at the following methods and features:

  1. Photos

Clicking and uploading photos across various channels is the core feature of Instagram. People may use filters and other photo enhancement features to boost their images.

  1. Videos
Must Read  Business Model of Swiggy - How Does Swiggy Make Money?

Originally, Instagram was just a photo-sharing device. Later, users were allowed to share videos for up to 60 seconds. Brands are also using this feature to advertise their products.

  1. Stories:

Users can share videos and images 24 hours a day using this app. The shared content disappears after 24 hours. Users can go live by using this function as well. In addition , companies can also post full-page ads to market their products.

  1. Instagram Direct

Instagram Direct enables users to post videos and photographs and chat with their followers. Users may even send messages to those they don’t follow. You can also share Instagram posts by using this app.

  1. Explore

Through using this app, users of Instagram can find anything and everything. They can use hashtags and usernames to figure out what they’re searching for. Apart from this, they will explore the content of the featured page by clicking on the link. You can also see the latest actions of the people you are watching.

  1. Filters

Instagram offers a variety of filters that allow users to enhance their images.

The Business Model of Instagram is composed of the key features listed above. Now let’s see how these apps help Instagram make money.

business model of instagram - 3

Instagram Revenue Model: How does Instagram make money?

business model of instagram - 6

Now, after hearing about Business Model of Instagram, let ‘s move on to its sales model. Instagram receives nearly all of its revenue from advertisements. Instagram Advertisements come in different forms, which are provided below:

  1. Photo Advertising

Promoters will advertise their goods by sharing persuasive images on Instagram. These pictures can be in a square or a landscape format. Such images include the Call to Action (CTA) button. The user is taken to the correct page on the company website of the promoter.

  1. Video Advertisements

Promoters may also use videos to advertise their products. With the power of sound, motion and sight, videos add an extra attractive quality. Such videos also have a Call to Action (CTA) button to take the user to the respective page of the promoter ‘s website.

Must Read  Business Model Of OYO Rooms – How Does OYO Make Money?

  1. Carousel Advertisements

It’s the most common way to advertise items. Promoters market their products using a sequence of images or videos. These videos or pictures are taken by Call to Action (CTA) to take you to the promoter ‘s website. Such advertisements are ideal for brands wishing to show the flexibility of their products.

  1. Stories Advertisements

These are full-page ads that pop up when a user sees Stories from the people he follows. Within these Stories, there is a Call to Action (CTA) click. This button is available as a swipe-up option that brings the user directly to the promoter ‘s site.

  1. Facebook Advertisements

Instagram is a crucial component of Facebook’s business model due to its increasing user base. Facebook Ad allows the Promoter to put ads on Instagram through Facebook, even if it doesn’t have an Instagram account.

  1. Sponsored Posts

These posts are just like daily Instagram posts. They’ve got a sponsored tag and a call to action (CTA) button. Like Facebook, supported advertisements receive much of Instagram ‘s revenue.

  1. Selling Information for Users

Instagram’s user agreement notes that “you accept that a company or other organization can pay us to show your username, resemblance, photographs and possible moves you make, in conjunction with paid or supported content or promotions, without any compensation to you.”

Sure, this means that you can sell your data to Instagram, and it definitely does. Since compliance with GDPR, it has been updated, but there is still no assurance that the data will not be sold.

Instagram uses this collection of ads and allows users to monetize their presence on the site. It not only helps businesses raise brand recognition but also helps to increase website visits and sales.

Now that we know about the Business Model of Instagram, let us find out the main reasons for its success.

business model of instagram - 4

Other Notable features in the Business Model of Instagram

The Business Model of Instagram is unique and changing. Let’s look at key takeaways and see how Instagram has reached more than 1,000 million users.

  1. Customer-centered approach

Instagram provides easy-to-use features on the web. This addresses three major issues: select stunning images by adding filters, easily combining them, and uploading and sharing them through various platforms.

Must Read  Business Model of Trivago – How Does Trivago Make Money?

This process is so easy that it gives users a smooth experience, creating real value for photographers and photo lovers. It is the primary explanation for the ever-increasing Instagram user base.

  1. USPs Defined

Businesses need to create Specific Selling Points (USP) for their performance. Instagram USP is improving images by choosing several filters. Organizations need to be specific on their approach to the creation of software and what they intend to do about the application.

  1. Start simple and grow slowly

Instagram was launched in 2010 but did not receive any revenue until late 2013. It began as a free image sharing application, and this aspect of the Business Model of Instagram is still the same.

This has grown is the use of algorithms to monetize consumer interest. Instagram launched straight away and then added enriching features to the software. This strategy has helped Instagram grow remarkably.

  1. Build a network

Instagram has built the framework instead of using other social channels. Instagram’s network has expanded so quickly that it has been the biggest reason for Facebook to buy it.

Instagram and Facebook frameworks complement each other incredibly well. And that’s what led to their exponential growth.


Business Model of Instagram has revolutionized the social media network.

A website that began as a simple photo-sharing application has now become a forum for brand promotions. It currently serves two purposes: a primary social media site for people to communicate and a forum for companies to reach out to their customers.

The cost structure of the Business Model of Instagram covers the set-up, production, and promotion of technology that is designed to ensure improved user service. All of this allows Instagram to have a loyal and continually enthralled user base that eventually plays a key role in maximizing Instagram ‘s revenue.

With its customer-centric approach and over 1 billion users, Instagram is expected to continue to expand at a rapid rate. Along the way, many social media firms will learn a few things about how to be a giant that Instagram is now.

Related Articles:
Business Model of Quora
Business Model of Zomato

How successful are you finding the business model of Instagram? Would you have any ideas that could be useful for any company that is trying to follow an Instagram-like business model? Feel free to share your thoughts with us.