In 2015, Instagram contributed only 7% to Meta’s total U.S. revenue, according to Emarketer. Ten year’s later, the app is projected to account for half, according to the research firm’s latest forecast.

Instagram is projected to generate $32.03 billion in U.S. advertising revenue next year, a 24.4% increase from 2024, per Emarketer. This rise would put Instagram’s share of Meta’s U.S. ad revenue at 50.3%, marking the first time it accounts for over half of the company’s overall ad revenue.

A driver of Instagram’s success is its capacity to generate more revenue per user compared to other social media platforms. According to Emarketer, since 2019, Instagram has surpassed Facebook in terms of average revenue per user: Currently, Instagram earns $223 per U.S. user, while Facebook generates $191. TikTok ranks third, at $109 per user, according to Emarketer’s report.

“As other social platforms flood their services with more ad placements, Meta is focused on making its ads more efficient, primarily through AI,” said Jasmine Enberg, principal analyst at Emarketer.

Enberg added that Reels, Instagram’s short-form video product, has been “a major driver of Instagram’s growth,” as as social media content becomes more video-driven.

“Instagram is now a video-first platform, with users spending close to two-thirds of their Instagram time watching videos,” she said.

As Reel’s become more popular with users and advertisers alike, Instagram’s growth drivers are shifting. In 2024, the feed accounted for 53.7% of total ad revenue, while Stories contributed 24.6%. However, both of these shares are declining as revenue from Reels increases.

According to Emarketer, since 2015, Instagram’s user base in the U.S. has increased by 142%, rising from 61.49 million to 148.73 million.

Perks of a TikTok Ban

As the ad industry braces for a potential TikTok ban in January, Instagram is preparing for a significant increase in advertising spending.

Enberg said that if a TikTok ban is enforced, Instagram could capture more than one-fifth of the $12.34 billion in ad spend previously allocated from the platform.

Instagram is keenly aware of the opportunity; Enberg pointed to the app’s efforts to recruit TikTok creators since the platform became threatened by a ban.

Instagram has also been introducing new features, including allowing users to test Reels by sharing them with a small group of non-followers and introducing an update that helps smaller accounts get discovered more easily. In 2025, the platform is likely to continue positioning itself as a haven for creators seeking an alternative to TikTok.

Federal Appeals Court Upholds Law That Could Lead to TikTok Ban

As the social media landscape continues to shift, Meta’s growth drivers are changing as well. By 2025, revenue from Instagram Explore, Reels, and a potential new advertising offering from Threads are projected to represent a combined 9.6% of the company’s overall revenue, as Feed and Stories shrink to 73.8% collectively.

Enberg said that while it’s likely that Meta will roll out ads in Threads starting in 2025, the process will be slow. “Threads is unlikely to be a major contributor to Meta’s ad revenue in 2025,” she said.