Jul 2, 2019 - Technology

How much revenue Instagram makes per American user

Data: eMarketer; Chart: Harry Stevens/Axios

Facebook hasn't yet said whether it makes more from users on Instagram versus users on its core service, but a new report suggests that Instagram isn't providing the company with more revenue per person, at least not in the U.S., according to data from eMarketer.

Why it matters: The data shows that despite reports of slowed Facebook app usage and in the U.S., Facebook’s flagship app still monetizes users better than Instagram.

Driving the news: Instagram announced last week that it would begin placing ads over the next few months within its "Explore" tab, or the section of its app that includes tailored recommendations of posts for users to browse, watch or shop.

  • The "Explore" tab was one of the last places on the app that was not commercialized.
  • Facebook says that more than 50% of Instagram's 1 billion+ users use the Explore tab monthly.

The big picture: Instagram's push to increase ad revenue comes amid warnings from executives of slowed ad revenue growth on the main Facebook app News Feed, due to privacy issues, user saturation and less user engagement.

  • This data suggests that Facebook is continuing to grow its revenue per user in other ways, like via video ads on Watch or ads in Facebook's Marketplace section.

What's next: Facebook quietly elevated its top advertising executive David Fischer to chief revenue officer, giving him more oversight into growing revenue across all of its properties, Business Insider's Lauren Johnson reports.

For transparency: eMarketer's methodology ... "Estimates are based on the analysis of various elements related to the ad spending market, including macro-level economic conditions; historical trends of the advertising market; historical trends of each medium in relation to other media; reported revenues from major ad publishers; estimates from other research firms; data from benchmark sources; consumer media consumption trends; consumer device usage trends; and eMarketer interviews with executives at ad agencies, brands, media publishers and other industry leaders."

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