Alexis Kestler
Undoubtedly, Instagram is one of the most popular social media platforms. The app has approximately one billion active users sharing their pictures, stories, and videos daily. So, it's only natural to wonder how much this tech giant is worth. Learn that and more in this blog post, “Instagram Net Worth.”
Silicon Valley is known to be the home of the largest and most valuable companies in today's digital world — and Instagram is no exception. The story of Instagram is one of wild success and unrivaled financial growth. Since its acquisition by Facebook in April 2012, Instagram has skyrocketed from a small social media network to one of the top most valuable tech companies of our time.
For context, Instagram's brand value reached 33.48 billion U.S. dollars in 2022, marking an increase from the estimated value of 25.07 billion U.S. dollars the previous year. It is worth noting that Instagram currently ranks as the seventh most valuable media brand globally. How did it get to this point, and just how much is Instagram's net worth? Read on to discover the answer!
How Much Is Instagram Worth?
As of 2023, Instagram is approximated to be worth over $100 billion — a hundred times what Facebook paid for the photo-sharing app back in 2012! Due to its high adoption and engagement rates, the platform has become an invaluable asset for many businesses, brands, and individuals. Instagram has emerged as a pivotal hub for digital marketing and advertising, experiencing a notable revenue increase from $17.7 billion in 2019 to $24 billion in 2020.
The app has become so pivotal in the digital marketing vernacular that most marketers in the United States spend at least 15% of their budget on it. Looking forward, the market value of Instagram continues to rise, making it significantly more valuable than the day it was acquired by Facebook.
Instagram Net Worth: A Detailed Financial Examination
Instagram's Valuation: A Journey from Acquisition to Current Worth
Firstly, it is important to trace Instagram's financial journey from the point of its acquisition. Facebook acquired Instagram in 2012 for a whopping $1 billion when the platform had only 30 million users. Fast forward to 2023, and Instagram is estimated to be worth over a staggering $100 billion as a standalone business.
Instagram's User Base: The Key to Its Growth
No doubt, Instagram's impressive user base plays a crucial role in its value. As of 2022, the platform boasts over 1.3 billion monthly active users, ranking it as the fourth most downloaded app worldwide.
Instagram's Business Model: Advertising and Beyond
Moreover, Instagram's revenue model predominantly relies on advertising. The platform's advertising revenue was estimated to be over $28 billion in 2021, a significant leap from around $10 billion in 2019. A striking feature of its business model is that Instagram takes a 30% cut of all advertising revenue spent on its platform.
Why Is Instragram Worth So Much?
Like most tech companies, Instagram generates most of its value from adverts and digital marketing. If this is your business model, it helps to have a large user base — and Instagram has nothing short of a gigantic one. In fact, Instagram has such as profound effect on social media marketing that more than 50% of Facebook's ad revenue comes from the app.
Yes! Instagram has generated more ad revenue than Facebook — the parent company. In 2023, Instagram accounts for up to 60.9 % of Facebook's digital ad revenue, making it one of the most valuable resources in the digital marketing market today.
To get a better understanding of why Instagram's market value is through the roof, we've compiled four top reasons:
1. Large User Base
As mentioned earlier, Instagram's user base is one to behold and has been one of the driving factors of its outrageous success. According to recent statistics, Instagram has about 1.2 billion monthly active users. This kind of user base enables Instagram to collect crucial data for advertisement purposes, making their ad targeting capabilities one of a kind.
The continuous expansion of Instagram's user base is a key factor contributing to the consistent year-on-year growth of its revenue and the subsequent increase in its overall value.
2. A large percentage of young adults
Yes, Instagram has a large user base, but who is using the app? Based on recent research regarding the age demographics of Instagram users, the largest segment comprises individuals aged 18 to 24, accounting for nearly one-third (32%) of all Instagrammers.
This age group represents the highest number of users on the platform. Due to the predominant user base consisting of young adults, marketing agencies have discovered a significant advantage in targeting specific audiences and efficiently promoting their products on Instagram.
3. Preferred marketing platform by marketers
According to recent polls and statistics, over 78% of marketers believe Instagram is the best way to reach and engage with consumers. Marketers appreciate the convenience of Instagram, as it allows them to effortlessly share daily stories, apply personalized filters, create engaging videos and posters, and directly connect with customers for prompt feedback, eliminating the need for intermediary platforms.
The following are the top five formats marketers find effective for social media marketing:
- Instagram Post
- Instagram Stories
- YouTube videos
- Instagram Video
- Blog Post
When asked what app they preferred for social media marketing, marketers came up with the following results.
- Instagram: 89%
- YouTube: 70%
- Facebook: 45%
- Blogs: 44%
- Twitter: 33%
As you can see, Instagram occupies a unique position in the marketing world, making it the preferred choice among brands.
4. High Engagement Rate
Another aspect that makes Instagram one of the most desirable social media platforms is the high engagement rate in the app. The app is used by almost every high-profile user and individual, allowing them to make their own personal accounts and share caustic content with friends or followers. Most large brands, including large sports teams, musicians, restaurants, and more, have been using Instagram for years! This makes the app better at driving engagement, thus making it preferred by marketers.
It is worth noting that a significant portion of brands on Instagram, approximately 60 percent, consistently apply the same filter to every post they share on the platform. Furthermore, roughly 80 percent of Instagram user accounts actively follow at least one brand or business. Impressively, each day, around 200 million users visit businesses on Instagram. Additionally, 90 percent of Instagram users follow at least one business account on the platform.
Note:
Instagram boasts higher engagement rates compared to Facebook, with 17 times more engagement, as well as outperforming Twitter, with a remarkable 33 times more engagement.
Bottom Line
Now you have just the basics about Instagram's net worth — it's all in the user base. Since Instagram makes money through serving ads, its large user base of over 1 billion people is a significant asset.
The diversity and high engagement levels of the users also make the app the preferred app for advertisers, thus providing them with a substantial source of income. In days to come, we can only see Instagram's net worth grow as its user base continues to expand.
