Instagram now has a billion monthly users and is driving parent Facebook's mobile growth
Former Facebook executives have called Instagram a "priceless" acquisition. In six years since Mark Zuckerberg paid $1 billion for it, the app has grown from 30 million to 1 billion users.
Instagram is the world’s fastest-growing social network, which crossed a billion monthly users last week. Its last 500 million users got added in two years, while the first 500 million had taken six. In fact, the last 200 million took just 10 months (September 2017 to June 2018).
That is a 20-fold growth since Facebook acquired Instagram back in 2012 for $1 billion, an amount that seems paltry in hindsight. The enormous rise of Instagram which started out as an iPhone-only photo filter app is, what many say, the consumer tech story of the decade.
Today, Instagram is a vibrant social network that thrives on all kinds of users —individual content creators, brand marketers and advertisers, online sellers, and tens of thousands of interest-based communities in travel, fashion, food, lifestyle and tech.
When Facebook acquired Instagram, the app had 30 million users and zero revenue. Six years on, Instagram is estimated to pull in ad revenues of $5.48 billion, accounting for more than 5 percent of the US digital ad market, as per eMarketer. Add to that a billion monthly active users.
Instagram will also drive close to a third of parent Facebook’s mobile ad revenues. Monica Peart, eMarketer's senior forecasting director, said:
“Facebook’s user growth rate in the US has slowed down, and is now about the same as that of internet users. Instagram — with its rapidly increasing advertiser base—will quickly become the engine that drives growth for the company overall.”
On an average, Instagram adds 200 million users every year. Peer social networks like Twitter, for instance, has garnered less than 350 million users in 12 long years.
Even Instagram Stories, a product started in 2016 to rival hipster Snapchat, crossed 300 million daily active users in just 18 months. Snapchat, on the other hand, has managed 191 million daily actives in six years.
The Instagram juggernaut thus is inexplicable to even those who run the company. Co-founder & CEO Kevin Systrom said at an event last week,
“It’s [the growth] incredible, and it’s something Mike [Krieger] and I never thought would happen… We’ve watched with amazement as the community has flourished and grown.”
Facebook’s former director of global business marketing, Mike Hoefflinger, wrote in his 2017 book Becoming Facebook,
“The Instagram acquisition has created an ever-growing gravity for the single most important thing Zuckerberg needs for the success of Facebook in the long term: the desire of the world’s best people and their creations to join with him.”
Hoefflinger reckons that Instagram’s successful acquisition allowed Facebook the leverage to go after WhatsApp ($19 billion) and Oculus Rift ($2 billion) in subsequent years (both buyouts happened in 2014).
“And therein lies the priceless value of the Instagram story: a clear message to the best builders in the world that if you want to play truly big, come work with Facebook.”
To further its next phase of growth, Instagram released a standalone app (IGTV) last week that allows creators to share long-form vertical videos upto an hour. IGTV posts can also be viewed within the main Instagram app. Co-founder Kevin announced,
“It’s time for video to move forward, and evolve.”
This is Instagram’s shot at YouTube and Snapchat Discover, both of which run on creator-generated videos and rake in millions of ad dollars.
Like YouTube, IGTV algorithms will throw up results based on the user’s interests and previous searches. IGTV is ad-free to begin with, but is tailored for monetisation eventually.