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Instagram will share ad revenue with influencers for the first time ever

Thursday, May 28, 2020 by Robinhood Snacks | Disclosures

Instagram: "Beautiful day in Ibiza... also link in bio for this CBD wine"

Less CBD lotions on your Insta feed... Something we can all get behind. And it might happen now that Facebook-owned Instagram is adopting YouTube's money-maker strategy: ad revenue sharing with content creators. It starts with IGTV, the one Instagram feature that you (probably) never use:

  • IGTV: Instagram launched the video app back in 2018 to compete with YouTube. You can use it separately, or directly through the Insta app to watch/upload up to 1 hour of video.
  • Insta will start running ads on IGTV, then give creators a 55% cut of revenue from their vids (Google has the same split for YouTube creators — #Zucked).

This is a first... In 2019, Instagram made $20B on the ads it placed in your feed and between friends' stories — that accounted for 25% of Facebook's total revenue. But Instagram has never shared ad revenue with creators before (even though creators drive usage):

  • "Influencer marketing" is the main way creators can monetize their Insta followings — eg: "casually" posing with a tub of protein powder or an oversized watch in the Maldives.
  • "Revenue sharing" on IGTV gives influencers a 2nd (and possibly much larger) money-making stream for their personal brands.
THE TAKEAWAY

It's all about the user-generated content... Creators follow the ad bucks. By intro'ing revenue-sharing, Instagram may woo more famous creators onto IGTV. More popular creators = more popular content = more users = more ad money for Facebook. If Instagram's 1B+ users start tuning into IGTV to see their favorite YouTuber, Alphabet (YouTube's owner) is in a Zuck load of trouble.