Beating YouTube, Instagram Shows Rp.273.6 Trillion Ad Revenue

(SA Travel Blogger / Pixabay)

JAKARTA - Instagram may not be the biggest cuan (money) generator for Facebook, but recently it has broken the bitter opinion of those who belittled them.

Quoting Bloomberg, Wednesday, February 5, the application that was acquired by Mark Zuckerberg generated USD20 billion, equivalent to IDR273.6 trillion in advertising revenue throughout 2019, of course this figure accounts for more than a quarter of Facebook's total revenue.

In fact, Instagram did not have a model to generate revenue when it was acquired by Facebook in 2012. Now the app makes money in the same way as Facebook by selling ads that appear in the Stories feature, in the Feeds, and in the Explore tab. Now the Instagram team is increasingly finding ways to integrate ads between user content that sometimes appears on Home.

Instagram's sales figures are very attractive compared to YouTube which only made US $ 15 billion last year. Ad revenue is only about 10 percent of total Google revenue.

What's the first GIF you're going to send? pic.twitter.com/EqyU7adjkj

- Instagram (@instagram) February 4, 2020

Alphabet CFO Ruth Porat told investors recently that the cost of the creator's content was made up of YouTube's estimated "content acquisition" costs of $ 8.5 billion.

Unlike YouTube, Instagram doesn't share ad revenue for its creators. Previous reports revealed that Instagram only pays for certain creator content on IGTV features.

In this case, the company based in Menlo Park, USA only pays for the production costs of its creators, not sharing the profits of advertising like YouTube. The cost is estimated to be no more than hundreds of thousands of US dollars.

Over the last few years, Facebook has focused on providing monetization features on Instagram. In order to facilitate a brand to sell their products directly from the application. Facebook is also developing an online shopping feature in its Instagram application.

Not only that, Instagram also provides access to a number of creator content to enter products sold on Facebook, this feature is designed to help coordinate a brand's offering.

In order to increase the revenue generated by Instagram and Facebook, both will expand their tools to provide brands access to content creator metrics.

Other information, it is only natural that Instagram ad revenue soars, because the application has more than 1 billion users, the latest data shared by Facebook in 2018. Meanwhile, Instagram's monthly active users in Indonesia alone in 2019 were reported to have reached more than 61 million.