Instagram has grown into one of the biggest platforms in Meta’s family, shaping trends and driving culture worldwide.
Every scroll, like, and reel you watch connects to a carefully built business model that powers billions in revenue. So, how does Instagram make money? The core comes from ads, joined by subscriptions, creator tools, and shopping features.
In this guide, I’ll break down each stream, highlight the most recent changes, and explain why Instagram is a key engine behind Meta’s growth.
The Big Picture: Instagram’s Role in Meta’s Money Machine
Instagram has become Meta’s fastest-growing platform and a major source of revenue. This dominance comes from demographics. Instagram attracts younger audiences who spend more time on Reels, Stories, and Explore compared to other Meta apps. Advertisers pay a premium to reach these groups, which makes Instagram vital for Meta’s long-term ad business.
Instagram’s earnings also support Meta’s broader goals. Money from ads and subscription funds projects in artificial intelligence, augmented and virtual reality, and new monetization tools across the company. For Meta, Instagram is the central growth engine that powers innovation across the business.
Quick Snapshot: Instagram’s Revenue Streams at a Glance
When people ask, How does Instagram make money, the answer spans several revenue streams. Ads remain the largest driver by far, but subscriptions, creator tools, and commerce also play an important role. Here’s a quick breakdown before we dive into each one:
| Revenue Stream | What It Means | Why It Matters |
|---|---|---|
| Advertising | Ads in Feed, Stories, Reels, Explore, and profiles | Still the backbone of Instagram's business; accounts for most of the $66.9B in estimated 2024 revenue |
| Subscriptions & Paid Features | EU Ad-Free plan and Meta Verified (consumer + business tiers) | Adds recurring income and helps comply with EU regulations |
| Creator Monetization | Creator Subscriptions and Gifts (Stars worth $0.01 each) | Expands loyalty tools for creators and gives Instagram a share of fan support |
| Commerce | Shops integration, now moving to website checkout (as of Sept 2025) | No longer a direct fee stream, but strengthens ad demand for retailers |
This table sets the stage. In the next sections, I’ll walk you through each stream, show what’s changed recently, and explain how they fuel Meta’s broader growth.
How Does Instagram Make Money From Advertising?
Advertising is the backbone of Instagram’s business. In 2024, ads on Instagram generated most of the platform’s $66.9 billion in estimated revenue. That shows just how central ads are to Meta’s success.
Ads appear in almost every part of the app:
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Feed ads that blend with photos and videos
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Stories ads between clips
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Reels ads, including overlay formats, post-loop spots, and in 2026 even unskippable breaks under testing
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Explore ads shown as you discover new content
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Profile ads, which Meta still runs even after ending its revenue-share test
Advertisers pay using CPM (per thousand impressions), CPC (per click), or CPA (per action). This flexibility makes Instagram one of the most attractive digital ad platforms worldwide.
And if you’ve ever wondered how do influencers make money, much of it connects back to advertising. Brands pay creators to feature products in posts, Stories, or Reels because Instagram’s ad system already proves its value.
Subscriptions & Paid Features (Meta’s Direct Revenue)
Instagram has started to earn recurring income through paid options. These are smaller than ads, but they show how Meta is building new revenue streams.
EU Ad-Free Plan
Since late 2023, you can pay to use Instagram and Facebook without ads in the EU, EEA, and Switzerland. In November 2024, Meta reduced the price by about 40%. The plan now costs €5.99 per month on web or €7.99 on iOS and Android for one account, with extra charges for linked accounts (Meta Newsroom).
This subscription exists to comply with European regulations, while also giving Meta a direct revenue line outside advertising.
Meta Verified
Meta offers a paid verification service that includes the blue checkmark, added account protection, and access to support. Prices vary by region, and Meta adjusts them over time. A business tier is also available with extra benefits for brands (Meta Verified for Business).
These options don’t rival advertising in scale, but they give Instagram more predictable revenue while meeting regulatory demands and offering users additional features.
Creator Monetization (Revenue-Sharing Features)
Instagram also makes money by sharing revenue streams with creators. When you support a favorite account, part of that transaction goes through Meta. This setup encourages creators to stay active while adding another layer of income for the platform.
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Creator Subscriptions: You can pay monthly to access exclusive content from certain creators. Meta originally promised not to take a cut until at least 2024. Terms now vary, but subscriptions still strengthen the link between creators, fans, and Meta's revenue system.
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Instagram Gifts: Fans can send virtual gifts on Reels and live videos. Each Star is worth $0.01, which Meta pays out to creators after processing fees. Since Stars are bought through in-app purchases, Meta benefits from the transaction flow (Instagram Help Center).
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Program changes: Meta has retired several older experiments, such as bonuses for Reels and revenue-sharing from profile ads. While creators no longer earn from these programs, Meta continues to display ads in those spaces, meaning the company keeps the revenue.
For many creators, this is also where the question of how many followers on Instagram to make money becomes important. Different monetization tools require different thresholds, so your ability to unlock features depends on audience size.
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Commerce and Shopping on Instagram
Instagram once aimed to turn itself into a full shopping hub. For years, brands could set up Shops with in-app checkout, allowing you to browse and pay without leaving the app. That model generated revenue through selling and processing fees.
In 2026, Meta made a major shift. The company retired in-app checkout in the United States and other markets, moving Shops to website checkout only. Now, when you tap “Shop Now,” you’re redirected to the retailer’s site instead of completing the purchase inside Instagram.
This change means Instagram no longer earns direct fees from transactions. However, commerce still matters for revenue. Shops drive advertising demand because retailers pay for ads that push shoppers to their websites. By keeping product discovery native but pushing purchases off-platform, Instagram ensures shopping continues to feed its ad machine.
How Much Money Does Instagram Make?
It’s tricky to pin down exact figures because Meta doesn’t report Instagram’s revenue separately. Still, analysts publish reliable estimates that give us a clear picture.
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In 2024, Instagram generated about $66.9 billion in revenue, making up roughly 40% of Meta’s global income.
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Forecasts for 2025 suggest Instagram will bring in over half of Meta’s U.S. ad revenue, more than Facebook’s share in the same market.
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Across Meta as a whole, ad revenue reached $46.56 billion in Q2 2025 alone, underlining how critical advertising remains to the business.
So, how much money does Instagram make? Based on the latest data, the platform is bringing in tens of billions each year, enough to rival the GDP of small countries. More importantly, its growth shows Instagram has overtaken Facebook as Meta’s strongest revenue driver in key markets.
Conclusion
By now, you’ve seen exactly how does Instagram makes money. Ads remain the core engine, bringing in tens of billions each year, while subscriptions, creator tools, and commerce add new layers of revenue.
These income streams fuel Instagram’s growth and give Meta the resources to expand into AI, VR, and other innovations.
The takeaway is simple: every post you see, every Reel you watch, and every subscription or shop link you click feeds into this business model. Understanding it gives you a clearer view of how the platform shapes the digital economy.
FAQs | Frequently Asked Questions |
Does Instagram take a cut from creator subscriptions?
Instagram originally promised not to take a cut from subscriptions until at least 2024. Since then, terms may vary, but the company continues to highlight that most of the revenue goes directly to creators.
How does Instagram decide which ads to show me?
Ads are based on your activity, interests, and connections across Meta’s platforms. Advertisers can target you by demographics, behaviors, or custom audiences.
What payment methods work for Instagram subscriptions?
You can use credit cards, debit cards, or mobile wallet options, depending on your region. App store rules also apply if you subscribe through iOS or Android.
How do Instagram Gifts appear in Reels or live videos?
When you send a gift, it shows as a visual icon during the video. The creator receives credit in Stars, which convert to real earnings.
Is Instagram planning new paid features?
Meta hasn’t announced specifics, but trends point to expanded subscription options and new ad formats in Reels as Instagram deepens monetization.