Although Instagram doesn’t collect any user information, the company still generates revenue from advertising sponsored products or by having customers purchase products through its mobile apps. In the first twelve months of 2015, Instagram spent $22 million on advertising, bringing the average cost to a user to $6.55 per Instagram ad, and generating $3 billion in revenue.
What’s an Instagram ad?
An Instagram ad is a simple text-based advertisement that appears after a user taps the Like button on an Instagram post, as well as a user’s name and location. The image is a “gallery” of pictures or videos of a person’s home, school, place, or location that have been captioned or filled in with information (such as “How to Make a Better Grilled Cheese Sandwich”). While these advertisements can be used to generate revenue from Instagram subscribers, the Instagram ads generally cost around two or three cents each. For instance, on April 28, 2015, Instagram placed two ads for Chicken Pita Pizza at around $2 a square foot for a six-block area, or just around $80 a month.
How do Instagram users earn money?
Instagram has the power to “reward” its users with rewards, usually based on activities that people take in their Instagram Stories. The more posts a user creates, the more rewards they earn; posting a lot of photos, for example, will increase a user’s “views” in your Stories, which helps them earn money. The average Instagram Stories user posts around three posts per hour.
What platforms are Instagram available on?
Instagram is available on all platforms the same way it is on Apple’s iPad and Android Smartphone. Instagram is available on smartphones and tablets in the United States since April 6, 2013.
What are Instagram’s operating margins?
Instagram’s operating margins are around 5-10%, with gross margin over 55% in January 2015 and over 50% in February 2015. Instagram’s revenue is also more than 60 months ahead of most other social networks, and most of the revenue of Snapchat and Vine also comes from Instagram. Instagram also has a great distribution network (over 60 million photos and videos that are shared on Instagram), which helps to attract people who don’t usually post photos of their home or school.
How many users does Instagram have?
The number of users of Instagram is around 1.3 billion. Instagram has 1.5 billion monthly active users, or approximately 17% of those
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