Back in 2012, Facebook bought Instagram for a cool $1 billion, and it was the best decision that they ever made. The app has done so well, in fact, that it’s starting to outdo Facebook.
There are a number of reasons for this on the social media front: it’s harder to post ill-advised-memoirs about your life journey, and the filters make selfies look good while simultaneously providing baby names for an entire generation (look it up, I’m not kidding).
In short, Facebook really needs Instagram. Here’s Business Insider with more:
The camera-oriented social network is, according to a Bloomberg analysis, now worth around $100 billion, or more than R1.4 trillion. Facebook bought the company for just $1 billion in 2012, marking a 100-fold return on its investment.
This is astonishing, given when Facebook bought Instagram, it only had 16 employees and its founders, Mike Krieger and Kevin Systrom, hadn’t worked out how to make money from the service.
Mike Krieger and Kevin Systrom (pictured above) sensationally announced that they are leaving Facebook on Monday. Still, they’re leaving behind quite a legacy.
• Instagram accounted for around 9% of all Facebook ad revenue in 2017. According to eMarketer, Instagram pulled in $3.64 billion of Facebook’s $40.1 billion global ad revenue.
• That will more than double and Instagram will make up around 17% of Facebook’s total ad revenue in 2018. eMarketer has predicted Instagram’s revenue to hit $8 billion.
• Instagram is growing faster than Facebook’s core app. Instagram is adding 300 million active users each month, whereas Facebook is adding 228 million to its main service.
• Advertisers see four times as much engagement on Instagram as on Facebook. Instagram is still pretty simple, making it easier for people to like and otherwise interact with brands they see.
What this proves is that Instagram is hugely important to Facebook, in large part because it has managed to stay scandal-free in the six years since it took off.
And Facebook just isn’t as cool as some of its younger rivals. Instagram is loved by younger users. It is less crowded than the main Facebook app, and perceived to be a kinder social network. Meanwhile, Facebook is losing its grip on users’ attention, with time spent on its primary service down 7% year on year this month.
Yep, everybody who isn’t a retiree is gradually growing tired of Facebook, and that should worry them.
Tied with this, Instagram is also increasingly popular with brands, who benefit from Facebook’s sophisticated targeting capabilities and the popularity of Instagram with a hard-to-reach younger demographic.
Where else would you post the pictures of your weekly ‘sad’ with accompanying inspirational quote? And how would we know what you had for breakfast? Or what the barista did with your coffee?
The world needs to know that you’ve mastered that yoga pose, on the beach, in a carefully curated sarong and co-ordinated bikini combo.
In other words, Facebook can’t afford to drop the ball on this one.
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