Instagram will be biggest beneficiary of TikTok ban

December 18, 2024 (New York, NY) – Ten years ago Instagram represented just over 7% of Meta’s (then-Facebook’s) total US ad revenue.  In 2025, it will account for more than half, according to the latest advertising forecast from Emarketer.  And it continues to grow at double-digit rates, as the social network improves the monetization of its segments.

In 2025, Instagram will generate $32.03 billion in US ad revenue, up 24.4% over 2024.  That puts its share of Meta’s US revenue at 50.3%, surpassing half for the first time.  Looking back to 2015, when Emarketer began breaking out Instagram revenue, the social network represented just 7.7% of its parent company’s US ad revenue.

“As other social platforms flood their services with more ad placements, Meta is focused on making its ads more efficient, primarily through AI,” said Jasmine Enberg, principal analyst at Emarketer. “Reels has been a major driver of Instagram’s growth, as social media usage and advertising has become more video-driven. Instagram is now a video-first platform, with users spending close to two-thirds of their Instagram time watching videos.”

Revenue has followed robust user growth in the US.  Since 2015, Instagram’s US user base has grown 142%, from 61.49 million to 148.73 million.  A key to Instagram’s financial success has been its ability to generate more revenue per user than other social platforms, including Facebook, which it surpassed in terms of ARPU in 2019.  Instagram makes $223 per US user, versus Facebook’s $191.  TikTok is a distant third with $109.

While Emarketer does not yet break out revenue by format in the US, we do so on a worldwide basis.  Feed represents 53.7% of Instagram’s total ad revenue and Stories represents 24.6% in 2024.  But those shares are dropping, as revenue grows on Reels. Revenue from Instagram Explore, Reels – and potentially Threads – will represent a combined 9.6% in 2025, with Feed and Stories’ share dropping to a combined 73.8%.

“It’s likely that Meta will roll out Threads ads in 2025, as the app has become more entrenched in the social landscape and advertiser interest has risen,” said Enberg. “Still, the rollout of ads is likely to be slow in order to not alienate users, and Threads is unlikely to be a major contributor to Meta’s ad revenue in 2025.”

Importantly, Instagram could get an extra boost if a TikTok ban takes effect in the US.  Instagram Reels is an obvious destination for brand marketers looking for a TikTok alternative.  Those who heavily advertise on TikTok could pivot to Reels and YouTube Shorts.  It’s also reasonable to expect that the number of short-video viewers on these platforms are on the rise—and would be boosted further by TikTok disappearing.  TikTok currently has 112.40 million monthly users in the US and generates $12.34 billion in ad revenues.

“If the TikTok ban is enforced in 2025, Instagram could capture over one-fifth of reallocated TikTok ad dollars in the US,” said Enberg.  “Instagram has been courting TikTok creators and advertisers since the law was passed, including by improving discovery for smaller accounts and allowing users to trial Reels before posting more broadly.  In 2025, Instagram will likely continue to “tiktokify” the app in an effort to make it even more attractive to potential displaced TikTok users, creators and advertisers. One way to do that would be by bringing back live commerce, which has been a boon for creators and small businesses on TikTok.”

Methodology

EMARKETER forecasts and estimates are based on our proprietary analysis and include both quantitative and qualitative data curated from public companies, government agencies, research and media firms, and interviews with expert executives in relevant fields. We regularly re-evaluate available data to ensure our forecasts reflect the latest business and economic developments and trends.

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EMARKETER is the go-to forecasts, data and insights provider across the marketing & advertising and ecommerce fields. We empower companies to make informed decisions that maximize revenue, optimize spend and anticipate digital disruption by providing actionable forecasts and context from expert analysts, carefully vetted data sources and our proprietary research methodology. EMARKETER is a division of Axel Springer S.E.