Instagram Business Model: How Does Instagram Make Money?

A common question for social media platforms is how they make money. For years, people have been puzzled by how Instagram, a free app, makes any money. The answer lies in the company’s advertising business model. A large part of Instagram’s income comes from businesses that want to reach out to its massive user base.

In order to do so, they pay the platform to place ads in users’ feeds. As the app continues to grow in popularity, this revenue stream will only become more important for Instagram and other social media platforms. In this article, you’ll learn how does Instagram make money.

Instagram, a subsidiary of Facebook, is a photo and video-sharing social media platform with over 800 million monthly active users as of September 2018. Since then, it has been acquired by Facebook for $1 billion.These platforms provide an immense opportunity for digital marketers to reach out to their target audience.

Let’s explore!

What Was Instagram’s Beginning?

Instagram was created by two college students who had no idea what they were doing. In 2010, Instagram was born as a photo-sharing app quickly bought up by Facebook for $1 billion. At the time, the app had 30 million users.

The app is originally designed for people to share photos of their everyday lives. But it wasn’t long before businesses and marketers started to see the potential for using Instagram to reach new customers.

Now, Instagram has over 1 billion active users and is still growing. It’s become one of the most popular social media platforms globally.

What was the Motive Behind Instagram?

When Instagram first came out, it was known as an app for quickly sharing photos with friends. However, the app’s founders had a much bigger vision for it. They wanted to create a platform where people could share their lives and connect with others worldwide.

Instagram has been tremendously successful in achieving this goal. Over the years, it has become a place where people can go to see beautiful photos and learn about new cultures. It has also become a place where people can find inspiration and connect with others who share their interests. The most recent addition is Instagram Stories, similar to Snapchat.

How did Instagram Grow?

When Instagram started out, it was a very simple app with a very limited feature set. It was just a photo-sharing app. But over time, it grew into something much bigger. So what was the key to its success?

There are a few things that contributed to Instagram’s growth:

  1. Facebook bought the app. It gave it a lot of exposure and helped it gain a larger user base.
  2. Instagram created a strong community of users who loved sharing photos and connecting with others.
  3. The app was well-designed and easy to use.

So, How Did Instagram Grows so Quickly?

Instagram was a fresh and new platform that appealed to users looking for an alternative to Facebook. The unique features of Instagram make it more popular among people, and the benefits are innumerable.

Instagram Features For Digital Marketers

Keeping up with the changes in social media is a challenge. Especially today, there are updates almost every week. Your social media marketing strategy needs to change frequently with these updates.

  • Video Features
  • Instagram Live Video
  • IGTV
  • Story features
  • Shoppable Tags

Video Features:

You’re probably familiar with Instagram video posts. They’re the same as regular photo posts, except they allow videos up to 60 seconds long. Before sharing a post, you can add filters, captions, and tag locations.

Videos generate more user engagement than pictures.

It is the best Instagram trick to track user engagements in your posts.

Live Video Feature:

Live video is completely different from Insta Video because it’s live.

It works like followers get a notification that you’re going live

Followers can comment or like your video in real-time, but the video doesn’t save to your account


It is the best feature of Instagram because you can share your videos for up to an hour, like an episode.

It is the fastest-growing trend in content marketing, with over 80% of companies using video marketing.

Story Features

The Instagram story feature is similar to Snapchat and comes with many filters and much more. It is only viewed for 24 hours before it finishes.

Shoppable Tags

These tags are for businesses to promote their products. You can be shoppable tags on your stories to sell the products.

How Does Instagram Make Money


As an influencer, You can grow your business and monetize videos. You are wondering how does Instagram make money? These are the few best ways to earn by Instagram.

  • Business Promotions
  • Get Sponsored
  • Sell Products
  • Earn Badges
  • Monetization with ads

Business Promotions

Setting up a business account is a common approach to expanding your company. For example, if you have a profitable Etsy or eBay shop where you sell your products, a professional Instagram account can help you promote it.

If your account allows Instagram shopping, you can tag your products and promote them directly. You can share your eBay or Etsy link in your profile. If you want to highlight the specific product for sale, you can directly add it to your bio to direct more people to it.

What to do?

  • Take bright pictures of the products you want to sell or the items you’re promoting to make them easier to find.
  • Create a hashtag to see what your competitors are using.
  • Encourage your customers to post a photo with yours and tag you.
  • Instagram’s insights feature allows you to keep an eye on your audience. You can see how many people are on your post and stats of audience age range, etc.

You can also use the app’s resources to identify and connect with new consumers. Pay to have posts that you want more people to view promoted. You may also include a button in your profile that links to an email address or phone number so that potential clients can reach you.

Get Sponsored

The most common way for Instagram users to make money is through creating sponsored posts or stories. For example, if some photos of brands dominate your Instagram page, the brands and companies could be willing to pay you to post a photo that features their product.

How to get Sponsored?

Potential partners may approach you in some instances. If you don’t want to wait for a brand to approach you, look into companies that can assist you in finding and working with brands.

Remember that sponsored Instagram posts and stories are held to the same advertising truth standard as any other type of promotion. In each paid article and story, make sure to add a disclosure. Go to your account settings and enable branded content, then tag your business partner.

Sell Products

You may not have a business to promote, but you regularly sell your old clothes and accessories on sites like Poshmark. Instagram might assist you in increasing your buyer pool.

Organize and photograph your clothing and other stuff pleasantly, and include as much information as possible in the caption. Also, include a link to the specific product in your bio to attract more attention.

Earn Badges

When you use Instagram’s Live function to share real-time videos, you may earn money straight from your audience. Viewers can buy badges, which are effective tips, to demonstrate support as you promote your talents, businesses, etc. Badges can be purchased for $0.99, $1.99, or $4.99. People who have purchased them have left heart icons next to their comments.

The revenue you earn is determined by the number of views your video receives in the feed. According to the Insta for Business site, you’ll get 55% of the profits raised per view.

If you do not match the conditions, you won’t be paid. For earning, your videos must be at least 2 minutes long. Instagram suggests keeping videos between 2 and 4 minutes long.

Frequently Asked Questions

How much money does Instagram pay you?

Instagram is one of the most Instagram med apps around. It’s an app used by pretty much everyone these days, and it’s no surprise that it’s insanely popular.

It can be utilized both for personal and professional purposes. Instagram is one of the most popular social media platforms, and there is a huge market for it.

It is known for its ad revenue. Instagram is a social media platform that pays its users through advertisement revenue. It is what it pays users.

Does Instagram pay like YouTube?

The answer to this question is an absolute yes. The difference between the two is that Instagram is an app that has been free since the beginning.

The business model on YouTube is to make money from ads. With Instagram, there are no commercials. The only way to make money is from your and others’ ads.

Final Thoughts

There are many ways to earn from social media platforms, but it takes only your time to explore things and start. You found many ways in this article on how does Instagram make money. It is the best platform for you to earn some revenue. We hope you found this guide helpful.

Christian Thomas is a die-hard business enthusiast who loves to share his ideas and experiences with other people. He writes for many websites including, Entrepreneur Business Blog, and How To Start A Small Business.