According to new data from WARC Media, while Instagram has been impacted by the introduction of Apple’s App Tracking Transparency (ATT) policy in 2021 and a subsequent weakening of the digital ad market, the app is recovering stronger than its social media peers.
WARC Media said that it forecasts Instagram’s advertising revenue to reach $71bn in 2024, driven by parent company Meta’s innovation with AI to assist content recommendation and advertising automation processes, as well as improved monetization of Reels, its short-form video product.
“The recovery of Meta’s ad business in 2023 has been one of the most notable media industry stories of the year,” said Alex Brownsell, Head of Content, WARC Media. “Twelve months ago, commentators were warning of a “reckoning” for Big Tech with platforms like Instagram hurting from signal loss resulting from Apple’s ATT policy, alongside a broader slowdown in digital ad investment.
“What a difference a year makes. Buoyed by innovations in AI targeting helping it to offset the impact of ATT and improved monetisation of Reels, it is only a matter of time before Instagram surpasses its Meta stable mate Facebook to become the world’s largest social media platform by ad revenue.”
Key insights
- Instagram’s global advertising revenue is forecast to reach $71bn in 2024 driven by innovations in AI targeting and monetisation of Reels, per WARC Media
- WARC Media forecasts Instagram to post quarterly advertising revenues by Q4 2023 of $17.7bn, up 25.8% year-on-year
- Campaigns on Reels reach nearly twice the audience as those on TikTok
- Nearly a third (30.4%) of consumers turn to Instagram when searching for brands
- The retail category is set to invest $9.1bn in 2024 as social commerce moves Instagram closer to the point of purchase
- Instagram is the most popular choice for 90% of influencers
WARC Media forecasts quarterly advertising revenues of $17.7bn in Q4 2023, up 25.8% year-on-year, and predicts its global ad revenue to reach $71bn in 2024
Instagram has recovered strongly following a largely flat 2022 as a result of Apple’s App Tracking Transparency (ATT) policy, alongside a broader slowdown in digital ad investment.
WARC Media added that buoyed by innovations in AI targeting to boost consumption levels, spanning content recommendation and asset creation, and improved monetisation of Reels, WARC Media forecasts Instagram to post quarterly advertising revenues in Q4 2023 of $17.7bn, up 25.8% year-on-year, and reach a total of $71bn in 2024.
The growing popularity of social commerce is moving Instagram closer to the point of purchase. The global retail category spend on Instagram will rise from $3.2bn in 2020 to a forecasted $9.1bn in 2024 per WARC Media. Ahead of retail spend, business and industrial ad spend is expected to reach $10.2bn globally, whilst other categories have modest growth.
“At the current trajectory, it is only a matter of time before Instagram surpasses Facebook to become the world’s largest social media platform by ad revenue,” said WARC.
According to WARC Media Reels is key, adding that campaigns on Reels reach nearly twice the audience as those on TikTok. Nearly a third (30.4%) of consumers turn to Instagram when searching for brands.
WARC Media research additionally found that Instagram is the most popular choice for 90% of influencers
Central to Instagram’s success is its traditional primacy as a platform for creator and influencer content albeit a dominance being challenged by TikTok, notes WARC Media.
