Instagram's Revenue Share with Creators | Ad Revenue IG

June 3, 2020: Mavrck’s commitment to fight racism and discrimination; Instagram announces several new features aimed at helping creators make money on the platform

Here’s what’s worth knowing this week:

Table of Contents

Our Commitment to Fight Racism and Discrimination

At Mavrck, we are committed to doing more to fight racism, discrimination and injustice. Hear from our CEO Lyle Stevens about the commitments we’ve made.

Instagram Will Finally Share Revenue With Creators

The Story

Last week, Instagram announced several new features aimed at helping creators make money on the platform, including ads on IGTV videos, digital badges that fans can purchase through Instagram Live, merchandise sales through Instagram Shopping and an expansion of Brand Collabs Manager.

Break it down for me.

Ads on IGTV videos: After years of speculation, Instagram is finally ready to start running ads on IGTV and sharing at least 55% of that revenue with creators. To begin, the ads will only appear when people click to watch IGTV videos from previews in their feed, and the initial round of ads will be vertical videos up to 15 seconds long.

Digital Badges: With the introduction of Badges, creators will be able to make money through Instagram Live, which has seen a 70% increase in views from February to March. The badges will appear as hearts next to a user’s comments on a livestream and will cost between 99 cents to $4.99. For now, creators will receive 100% of the money made from badges, though it’s believed that we could eventually see Instagram release a revenue-sharing agreement.

Merch Sales through Instagram Shopping: Instagram recently announced Live Shopping, which let creators and brands tag products during their live video. The platform has now announced plans to expand shopping access to more creators who want to sell their own merchandise.

Brand Collabs Manager Expansion: Instagram has announced plans to widen access to Brand Collabs Manager to all U.S. creators in the coming months.

How did Instagram support creators in making money previously?

They didn’t. Previously, the only way creators could make money on Instagram was by partnering with brands for sponsored deals. The platform offered no features for creators to directly monetize their content and influence in the same ways creators have been able to on platforms like YouTube, where rev sharing systems exist.

What’s in it for Instagram?

Revenue, duh. It’s no secret that influencers were already making money on Instagram without the platform’s help by launching ITC brands, selling merch, hosting live-streams and asking for donations to their Venmo accounts, promoting their Patreon accounts and more. Now that Instagram is providing feature support, it will get a cut of those transactions.

What’s Instagram saying?

“There isn’t a one-size-fits-all approach to monetization, so we’re focused on building a suite of tools that can support the different needs and ambitions of creators in the long term.” – Justin Osofsky, Chief Operating Officer at Instagram

STC POV
We’ve always said that the platform that optimizes for creators’ experiences will become creators’ platform of choice. With 68% of users coming to Instagram to interact with creators, the success of the platform is largely dependent on the success of its creators. While Instagram has built creator-specific tools to streamline the creation of “high quality” content on its platform, it has failed to share the ad revenue with the creators whose content is literally making the platform money. While one factor in becoming creators’ platform of choice includes tools to make “high quality” content, the other side of this equation, and the piece that Instagram has been missing thus far, has been clear and defined ways to monetize that content.

With Instagram taking its first foray into the world of all things creator monetization, it makes sense that the platform would look to borrow bits and pieces of creator monetization features from other platforms and seeing what sticks – instead of reinventing the wheel entirely. Badges, for instance, are increasingly popular on live-streaming platforms like Twitch and YouTube; the IGTV ad revenue split with creators (55%) is the same percentage YouTube takes; and merch sales have become increasingly platform on platforms like YouTube, TikTok and Twitch. Where Instagram houses so many different content formats (photos, videos, and live-streams), it needs monetization for all content formats in order to ensure all creators have equal ability to monetize their content.