Instagram finally gave in to content creators' demand, announcing its first true ad revenue sharing initiative after nearly a decade.
The move, announced Wednesday, comes as yet another wave of influencers replaces Instagram with more generous rivals. Launched in late 2010, Instagram sold out to Facebook for then-record $1 billion after less than two years in existence.
While the social media giant prioritized growth over profits for the majority of the following eight years, Instagram's 2019 turnover reportedly amounted to $20 billion. That's a pretty sizable sum for a platform that had no universal ad revenue sharing model until 24 hours ago.
Of course, sponsored posts have been a thing on Instagram for a rather long time now. However, traditional targeted advertising, Instagram's bread and butter, has so far only benefited its own bottom line.
This week's announcement suggests that state of affairs is changing due to how much "uncertainty" content creators are currently facing.
In reality, Facebook's unit can simply no longer afford to ignore the people driving its aggressively monetized engagement rates. Cue Instagram's first full-fledged ad revenue sharing push.
Starting right now, creators can begin monetizing their content via Instagram Live badges and IGTV ads, among other things. The Live Shopping feature will also be expanding to more influencers moving forward, Facebook's subsidiary said.
In a similar vein, Instagram's Brand Collabs Manager will soon extend its reaches, facilitating even more potential sponsorships. That was the good news. The bad news is that the these long-needed monetization options are rolling out at a glacial pace; exclusively in the United States, for the time being.
Instagram's ad revenue sharing push not too late
The change to Instagram's (lack of) ad revenue sharing model dovetails with a variety of anti-bullying tests started in mid-May. Both moves were meant to improve the platform's sustainability, making it more friendly toward both advertisers and creators alike.
While skeptics might argue Instagram's too late to share its revenue with creators, this is still a multi-billion dollar business. And when such a behemoth throws you a bone, you tend to refrain from immediate complaints.
Sure, Instagram's revenue-sharing game is severely lacking behind YouTube and even much younger TikTok. Yet the sheer might of its financial pull and user base are reason enough for any creator to consider its new proposal.
Instagram's creator revenue sharing initiative should hence make major waves in the social media game moving forward – tardy as it may be.