Instagram, the world’s largest and most popular photo sharing website has become a household name already. It is a billion dollars company that earns through advertisements. More than 1 billion users over the world use Instagram actively making it the second most used platform after Facebook. In fact, it goes without saying, Instagram is one of the most favorite apps among teenagers and even adults.

Do you know Instagram AKA Insta and IG, was first named as Burbn? Many major changes and upgrades happened to the fun-filled platform since its launch. So, want to know the story of Instagram and who owns it today? Well, let’s quickly jump into the topic.

Read: Instagram Business Model – How does it Make Money

Story of Instagram

Instagram is an American photo and video social networking service that allows anybody across the globe to create accounts and use it. It is the largest visuals sharing platform that is filled with fun. A lot of functionalities, filters for editing and capturing pictures and videos made it people’s favorite today. An average active user rarely skips exploring Instagram on each single day, don’t you agree?

The giant photo and video sharing platform which is available today on every smartphone was originally launched on iOS first. Only in 2012, it released its android version. Like any other start up product, Instagram didn’t generate any revenue until a year later Facebook acquired it.

History of Instagram

Instagram was created by Kevin Systrom and Mike Krieger in October 2010. For upto two years after its launch, Instagram was available on only iOS.

Systrom who was a Stanford University graduate quit the job at Nextstop to design an app for photo-sharing. He learned coding to design a web app called Burbn that let’s users check-in, post plans and share photos. Systrom named the app, Burbn.

Burbn to Instagram

He obtained seed funding of $500,00 from Baseline Ventures and Andreessem Horowitz to further develop his dream app that lets people share photos. 

That was when Instagram’s co founder Mike Krieger joined Systrom. They both worked on Burbn (named after Systrom’s love towards fine Whiskey and bourbons). 

Burbn was updated with liking photos, and commenting functions. Though there were check-in apps at that time, the photo sharing feature made this app unique.

Later, Burbn was renamed as Instagram (combination of words Instant and Telegram). The founders made many software updates, added many filter options to the app for upto 8 weeks. And that is how Instagram was brought into people’s lives.

Surprisingly, Instagram racked up 25000 users on the day of its launch. It soon grew up with one million users within 3 months, which made investors turn up to this app.

Facebook Bought Instagram

With a large user-base and rise in popularity, investors became interested in the company, Instagram. In 2011, the company was valued at around $25 million in funding.

Later, in April 2012, when the app had over 27 million users, Facebook made an offer to buy Instagram for around $1 billion.

In fact, Mark was not the only one who realized its potential. Twitter’s co-founder Jack Dorsey also made a formal offer of nearly $500 million in stock, Systrom declined the offer.

However, the founders agreed to Mark’s offer and sold the company to Facebook Inc., for $1 billion in cash and stocks on April 9 2012. Mark’s plan was to manage the website independently. 

According to a report, Systrom made $400 million with the deal.

Instagram & Facebook

Though Facebook acquired many companies that are into different industries, Instagram is the major revenue contributor to it. Almost 98% of ad revenue to Facebook comes from Instagram.

There were negative comments when Facebook announced acquisition of Instagram that is $0 worth and just 2 years old. But today, Instagram has grown so popular that at least 70% businesses choose it as their major marketing platform.

Journey of Instagram

Instagram left its creators boundless even during its initial days. It was downloaded more than one million times in less than a day when its android version was released in April 2012.

Instagram, that allows people to like, comment, edit pictures, chat, do live sessions etc went through many major changes growing slowly.

Here are some of the important upgrades and changes to Instagram.

Feature Updates

• In November 2012, the feature-limited desktop version was released.
• A photo of South Beach Harbor at Pier 38 by Mike Krieger on July 16 2010 was the first Instagram post.
• In November 2013, it started running ads (which is now bringing billions of dollars to the company).

Instagram’s design and features were updated multiple times. It’s parent company Facebook planned to offer more offline features to make it more accessible to users.

• In April 2016, Insta introduced comment liking
• It launched hashtags in January 2011
• In June 2012, it introduced Explore
• Instagram Direct was introduced in December 2013
• In August 2016, it launched Stories

The company’s main priority is to provide a great user experience. Therefore, it removed the “likes count” when it realized that people feel bad about the less number of likes to their posts. Only the original post owner can view the number and others can’t see the likes count.

• In 2020, it introduced Co-watching in Video Chat, and Instagram Reels, which became so popular.

Bottom Line

Thus after Facebook acquired Instagram, it became even more valuable. The company is now raking billions of dollars through ads and its newly introduced shopping feature. Also, it is contributing massive income to its parent company.

Want to know Who Owns Pinterest? Read it here.

Do you know Instagram users are spending an average of 28 minutes on the platform every day in 2020? It is the second most used (logged in) social media site that people use daily after Facebook.

Instagram, an American social networking service or platform for photo and video sharing was launched in 2010 by Kevin Systrom and Mike Krieger. Though it was first started as a fun platform, it is now a $100 billion company.

The world’s popular social media site, majorly accessible as an app needs no introduction. Frankly speaking, the majority of people across the world, have the app on their phone already. With its interesting and unique features, in no time it became people’s favorite and of course, a go-to online destination at least once in a day. The platform has over 1 billion monthly active users and over 500 million daily users as of 2020 according to a survey.

Okay, have you ever wondered how this giant fun and innovative social media service makes money? Let’s see that in this article.

However, let’s know more about the platform prior to that.

What is Instagram?

As said Instagram is a photo and video sharing platform where users can join for free, click, like, share and upload any media. It was initially started as a purely fun platform for such activities. Even the founders had never thought this fun loving platform would grow to such a global giant and successful platform.

However, Facebook, the world’s largest and most popular social media platform realized its value. It bought Instagram in 2012 for around $1 billion (in cash and stock).

Hence, Instagram since 2012 became a growing social media platform owned by Facebook. Since then its features, and business model were evolving and thus making a great impact on social media. In fact, it has become a great revenue contributor to Facebook later on. Though, Facebook and Instagram work independently in the same niche, both compliment each other very well.

If you are curious about how Twitter makes money, read here.

Okay, now let’s see the features, uses and strategies of Instagram to better understand how it makes money.

The basic actions one could perform on Instagram are: capture pictures, shoot videos, upload photos & videos, save them, share posts, like, comment on posts, chat with other users and explore latest trends.

So, in short, Instagram which is commonly referred to as Insta and IG offers the following features.

• Photos: Capture or upload photos to share with friends or public
• Videos: Capture or upload photos of 60 seconds to share with friends or public
• Stories: Post stories that appear to friends and disappear after 24 hours
• Explore Tab: To find latest posts by public figures or brands
• Instagram Direct: That lets you chat with other users
• Filters: A wide array of filters to edit photos and videos
• IGTV: Lengthy videos, mostly ads, recipes and DIYs etc
• Shopping: A new feature that lets users shop directly within the app

Who Uses Instagram Mostly?

Instagram is used by both individuals and businesses to share and explore the most happenings. Interestingly, the individuals are not just the audiences but storytellers, public figures, and influencers. In fact, it is Instagram that boasted the growth of influencers.

To simply state the stats, Instagram has:

• 1 billion monthly active users
• 500 million people who use Stories daily
• 52% of female users
• 48% of male users

Stats Useful for Brands

• 200 million users visit at least one business profile every day
• 1/3rd of most viewed Stories are from businesses

So, now comes the actual part: What is Instagram’s business model? Let’s quickly jump into that.

Instagram Business Model

Instagram, though started as a free platform to share and explore photos and videos, it grew into one of the most earning social media platforms. 

Facebook bought it when it was not generating any revenue. In fact, until 2013, Instagram didn’t make any money.

Later, when the platform gained huge user base and popularity, it started to make money by letting marketers buy user’s attention. Meaning, it introduced the ad revenue model and allowed brands and marketers to promote their businesses or products to its users. Yes, its business model is brilliant and of course, the same as Facebook, Pinterest and other social networking sites.

Read: Pinterest Business Model – How does Pinterest Make Money

As you can see the stats above, it is a giant platform where a large crowd, especially millennials and adults are present. The stats attract advertisers as they see the platform as a potential space to drive customers to their sites. Finally, that is how Instagram makes money too.

Moreover, after Instagram had introduced ads and shopping features, its revenue increased, though there is no exact number.

How does Instagram make money?

As said earlier, Instagram is full of story tellers, influencers, brands and audiences (who might become customers). In short , it has all resources to help businesses grow. Isn’t it?

With huge information, fun and space, Instagram has grown as a tiny search engine for discovering things that make people happy. For example, users shop, explore, verify brands and interact with brands before they make any decision.

So, it makes money through ads and shopping features. You got the answer.

It is even estimated that by 2021 Instagram will bring around 41% of ad revenue to Facebook.

Instagram Ads costs anywhere between $0.70 to $1 per click. In some cases, an ad can go up to $5 per click based on the competition, industry, location, placements, user demographics and ad placements. The ad process goes as per bidding.

According to Instagram blog over 2 million advertisers advertise on Instagram every month.

Therefore, it is clear that Instagram is making tons of money from ads. Moreover, though the ad costs are higher on platform, marketers still target users on the platform due to the potentiality.

So, here are types of ads that Instagram leverages for advertisers to help them grow their businesses while growing its own revenue.

Read: Netflix Business Model – How does Netflix Make Money

Advertisements

1. Photo Ads: Photo posts that appear on feed with sponsored tag and also a CTA button

2. Video Ads: Video posts of time frame 120 seconds with CTA button

3. Carousel Ads: Multiple photos in a single ad which users can swipe and see

4. Collection Ads: Products or photos are displayed and can be swiped below an image or video

5. Story Ads: Ads that automatically disappears on Stories and are available in a slideshow

6. IGTV Ads: As you know IGTV is a long vertical space that plays videos. Marketers can run an ad on IGTV with a video that excites users to click “Learn More”

7. Ads in Explore: Users see the ads when they are exploring on the platform. This is almost similar to the ads on feed.

8. Facebook Advert: Promoters who don’t even have Instagram can advertise on the platform through Facebook.

9. Sponsored Instagram Posts: The posts that are already posted can be tagged as sponsored Instagram posts to reach wider audiences.

10. User’s Data: Instagram doesn’t sell user’s data directly as per their privacy policy. It uses the data to improve your experience on the platform and to show you related sponsored ads.

Shopping Ads

Checkout Fees: Instagram has made it easier to shop products users love on the platform itself. Users don’t need to leave the app to make purchases. 

It charges sellers checkout fees as their commission for allowing them to make sales.

Shopping Promotions: Sellers can promote their products through ads and reach wider audiences. The sellers need not necessarily sell on the app itself but on any other site.

So, this is how Instagram makes money. It makes money completely through advertising and shopping ads or options. 

How Successful is Instagram’s Business Model?

According to Bloomberg, Instagram generated $20 billion ad revenue in 2019. Hence, it is clear that it is one of the highest revenue generating social media platforms after Facebook which generated $29.9 billion.

Instagram is making billions. Also, it’s quite simple to say reasons for Instagram’s success both in popularity and revenue. So, here are top reasons why Instagram is successful.

• Its Customer Centric Strategy

Instagram also became a major platform for marketing, it continues to deliver smooth customer experience. It strives to provide great service by introducing creative features and easy-to-use platform to customers no matter what

• Large User Base

As the platform provides great user experience, it is growing its user base (and also keeping the users). Due to the large number of users, it is a sweet spot for advertisers.

• Monetizing Algorithm

As Instagram has grown as a large platform for advertisers, it is monetizing users’ attention. Yet, it doesn’t disturb users with irrelevant ads.

• Independent Platform

Users on Instagram don’t need to go out to perform any actions. Users can even shop directly on the platform.

The expenses of Instagram are technology, development, customer experience and marketing. However, it has more than enough resources to manage its expenses.

Bottom Line

Instagram which was created to share photos, videos and other media has now become one of the favorite places to connect with people and with brands. In fact, it was difficult to reach or verify brands before Instagram and even Facebook. Thus it has made a major revolution in terms of advertisements and user experience with its incredible features.

Social media platforms have definitely become one of the most important things in people’s lives. Today. You will not find a single person who is not using some kind of social media account. Everyone knows why social media platforms were created in the first place. They were built to connect people through the internet. But over the years social media platforms have gained so much popularity and power. Today social media platforms are not just a medium that will connect you to other people they are much more than that. In the current world, social media platforms are not only being used by normal people but also brands and businesses. This is because people have understood that social media platforms are a great way of promoting their businesses. Not only that but they can also reach a wider audience if they are active on social media platforms.

But not all social media platforms are built the same way. Social media platforms like Facebook offer a wide range of options and features to its users. It is a great platform for people to connect with other people. Platforms like Instagram are great to look at the stories posted by your friends, family, and other celebrities. However, there is one social media platform that is quite simple in what it offers but greatly popular in today’s world. That social media platform is Twitter. When this social media platform was created a decade ago no one would have thought that such a simple concept would become a revolutionary idea. Today there are all kinds of people who are using this social networking site. It has given a platform for people to voice their opinions.

This article is completely about the business model and revenue generation methods of Twitter. Let’s dive into it.

What is Twitter?

As mentioned earlier Twitter is a social media platform. It is definitely one of the most popular social media platforms right now. Unlike most platforms that offer tons and tons of features, Twitter likes to keep things simple. It is mostly known as a microblogging social networking site. But the initial idea of the platform is drastically different from the site that you are witnessing today. Before Twitter, the founders were running a podcasting company called Odeo. One day Jack Dorsey proposed the idea about a platform that allows a person to communicate with a small group of people through SMS. But the name of the site was not always Twitter, it used to be twttr in its initial days. This is because the domain name Twitter was already being used. They changed the name of the company to Twitter when they purchased the domain name after six months.

Jack Dorsey stated that the idea for the name was perfect to define their website. As the word means the chirping of birds as well as a short burst of information. The first tweet was made by Jack in which he wrote ” just setting up my Twitter. But the site was not made available for the public right away. At first, Twitter was just an internal service that was used by employees of Odeo to communicate with each other. Later Twitter was acquired by Obvious Corporation along with Odeo. After that Twitter became its own company. But it was hard to define Twitter because even the founders did not exactly know what it was. Two instances made Twitter very popular. One SXSWi conference and the other is a NASA astronaut posted a Tweet from the international space station. Currently, Twitter has more than 320 million users across the globe.

Business model of Twitter

As mentioned earlier Twitter is a microblogging platform. Here people can post “tweets” to express their views on something. But the catch is that they have to do it using only 280 characters. You can post updates at all times. Not only that but you can also get notifications about the tweets posted by the people who choose to follow. People mostly follow their friends, celebrities, or their favorite brands. It provides a great platform for people to look at other people’s opinions. You have to be a registered user if you want to post a tweet. If you are not a registered user then you cannot post a tweet but Twitter allows you to read the tweets posted by others. You can do it using their website or application. The three main groups who are using Twitter common people, influencers, and businesses. 

Let’s look at what it offers them. 

Businesses

Twitter is one of the best social media platforms for businesses to promote themselves. You may be thinking that it would be hard for people to promote businesses using just 280 characters. But Twitter offers businesses more options to promote themselves. They can post video ads on the platform. But it is also important for them to get the right type of video that suits their context. They will be able to reach a wider audience if their ads are displayed at the right time. If the ad has low relevance to the discourse then they won’t be able to get the attention of the users. When these ads are correctly placed people will notice them and tell about the businesses to others. The ad formats of Twitter suit the platform. All of the advertising features on Twitter are self-served.

Influencers

Both influencers and Twitter are interdependent. Twitter needs the influencers to gain more users and influencers need Twitter to support their activities. The great thing that Twitter offers the influencers is the freedom with which they can express their thoughts. Twitter does not censor the tweets that are posted by the influencers. All of the messages are posted in the same way as they were written without getting modified. You must have heard about viral tweets. If a tweet made by an influencer goes viral then they will get a lot of promotion without spending money. Through the word of mouth, they will be able to generate organic traffic. It is a great platform for them to promote their upcoming events. Film stars, music artists, and sportsmen can keep their fans updated about their activities. This will help them to remain in the limelight.

Common users

Common users have a lot of benefits using Twitter. They can stay updated about the latest news, events, films, and sports. People can follow their favorite celebrities and look at every Tweet made by them. Users also have the opportunity to voice their opinions without getting censored. Twitter does not modify a person’s tweets just because they are not popular. It provides them a platform to express their views on things without feeling inferior to anyone who is famous. Twitter has actually been very successful in giving a voice to everyone irrespective of their social status. You can just see that people are not afraid to speak against powerful people. Many people have been called out on their bluffs and misinformation by normal people. People can provide views to counter fake news which is on the rise these days.

How does Twitter make money?

There are several ways in which Twitter makes money. Let’s look at each one.

Advertisements

At the end of the day, Twitter is a social media platform and the most common source of revenue of social media platforms is undoubtedly advertising. The majority of the revenue generated by Twitter is through advertisements. More than 80% of money generated by Twitter is through advertisements. There are many ways in which a company can promote itself on Twitter. The simplest way is to post a tweet that will appear on people’s timelines. People can even promote an entire account on Twitter.

The advertisers can post videos and images along with their tweets to promote a product or a brand. Twitter charges them depending on the traction generated by them. The advertisers can pay on the basis of pay per tweet or pay per click before posting an ad. They can also bid to show their ads at a particular place. Advertisers make sure that all of their ads are optimized for mobile devices. This is because nearly 60% of the revenue is generated through mobile devices. 

Data licensing

This is another way in which Twitter generates its revenue. For those who don’t know what it is, data licensing is the practice of sharing the data of its users under a legal framework. This means that Twitter shares data such as search history and recent activities of the users with companies. It shares both real-time and historical data with advertisers for money. This data will help the advertisers to come up with ads that will get your attention. They can use this information to make you look at their products next time you use Twitter. 

Conclusion

This is the business model of Twitter. It is a combination of both crowdsourcing and advertising business models. Twitter has become one of the most influential social media platforms of this generation and its popularity continues to grow. By looking at its growth you can be assured that it is not going to lose its relevance anytime soon. If you are interested in other business models like the business model of Uber then you can look at other articles on Postling.

Pinterest penetrated into most people’s lives as their library for discovering creative ideas. Isn’t it? In fact, the platform was created to serve the same purpose. The social media service and image or video sharing service is designed to inspire people with travel, food, decor, and fashion ideas. This amazing little search engine for discovering great ideas is now familiar across the world. Of course, the majority of its users are youngsters, moms and dads, but you will be surprised to know that nearly 15% of Pinterest users’ are above 65 years old. Shocked? Well, let’s see many such details in this article.

Who Owns Pinterest?

First things first, you must learn who owns Pinterest, and the story behind its creation before we see interesting facts about Pinterest. So, shall we?

Pinterest is a fastest growing company owned by Pinterest Inc. It was started in March 2010, by Silbermann, Evan Sharp and Paul Sciarra. Though Pinterest is called mostly as a social media service, it is unlike other sites Facebook or Instagram. 

It allows people to share images, videos, or GIFs of creative ideas instead posting their personal stuff. In short, Pinterest is all about and a single platform for finding creative travel ideas, recipes, home decor inspirations etc. Most DIYers and youth spend a lot of time on this platform scrolling through their feed and exploring other interesting things.

The company was named in the list of unicorn companies as it is one of the fastest companies to grow their user base to 10 million (in just a span of 2 years from its launch).

Want to know how Pinterest makes money? Read it here

History of Pinterest

Ben Silbermann who cofounded Pinterest with his two friends was fond of collecting things from his childhood. In fact, it is clear that the company is his purely from his childhood inspirations. However, there are other things that fueled his idea and made them create the platform. Let’s look into that.

Inspired by his colleague Silbermann left his job at Google to develop some iPhone apps and products. They didn’t work well though. That is when he paired up with his college friend Paul Sciarra and tried out many other products. One of those is Tote, a shopping app. So, as Pinterest was not an overnight success, it is not their first product. However, their shopping app didn’t become viral, but that left them with many thoughts.

They observed that many users are using the app to select, save the product and share it to themselves to buy it later somewhere. Yes, you guessed that! That is when the founders realized that people need an easy platform to collect and save things for later.

Thus, in March 2010 Pinterest was launched. However, it had only 10,000 users after 9 months. The interesting thing is Silbermann used to reach out to customers directly, offer his phone number to reach and provide feedback. For almost one year, users had to join the platform with an invite request. Only a year later, the service is available for everyone.

More About Pinterest

Pinterst went public in April 2019 with an initial valuation of $10 billions under ticker PINS. Last year (in 2019), the company was valued at $3.96 billion.

Thus, after Pinterest has multiplied its popularity and user base, it even entered stocks and gained huge value. There were losses as well.

However, Silbermann, the CEO and the founder of Pinterest has a net worth of $1.6 billion according to Forbes.

Although Pinterest is a free platform for anyone above 13 years, it is not such a place where anyone can publish anything. The idea behind is to provide a place for people to find a vast range of ideas for their search.

Users can share or upload media to their boards as pins in the platform. Other users can also view and pin the pins to their boards if it is made public. Thus the platform is pretty easy to use. Today, it has over 416 million monthly active users worldwide. It has 96 million monthly active users in the U.S. Of all, over 79% of its users are female.

Each more than 200 billion pins are handled by Pinterest and what’s most interesting is the conversion rate on the platform is higher than other sites like Facebook or Instagram.

Want to know how Telegram makes money? Read its Business Model here

The platform later even introduced “Pinterest for business”, in which businesses or entrepreneurs can switch their personal accounts to business accounts or create new ones. With a huge conversion rate and active monthly users, the platform attracted advertisers to start ad campaigns. In fact, that is how Pinterest started generating revenue. Of course, this even attracted investors to invest in the company.

Bottom Line

As you see, you have learned about the owner of Pinterest and interesting facts about it in this article. Hope you liked it.

Like many successful startups, Pinterest has grown slowly to this position where over quarter of the world’s population know or use this service.