Stories from inside the $9 billion Instagram economy
The separation between life and work has never been more narrow than it is on Instagram. It’s a place where just existing can be monetized–a platform where your particularly cute dog can make more than its owner, where tagging a brand in a photo can transform your career, where you don’t even have to be born yet to have 40,000 followers. Personal posts mingle with paid partnerships, ads slide innocuously by in an endless news feed where everything looks like a campaign for something.
There are some 800 million users on the platform, and 80% of them follow at least one business. Rather than an intrusion, brands seem like a natural part of Instagram’s ecology; in fact, products may boost engagement rather than dampen it.
For companies on the platform, the difference between their ads and products is vanishing. It’s not unusual for retail startups to launch solely on Instagram, nor for new companies to design their products around how they will look on a smartphone screen. Across industries, logos and branding are being optimized to catch the eye of a distracted scroller. And no wonder: an estimated 75% of users will click or browse after seeing a company’s post on the platform. It’s difficult to quantify exactly how much money flows to and from Instagram users, but analysts estimate that ad revenue on the platform reached about $8 billion this year. Another estimate puts influencer spending alone at more than $1 billion in 2018.
Amazon rules as the internet’s most profitable and efficient e-commerce fulfillment platform. But if you want to understand the way people spend and make money on the internet today–for better and worse–look at Instagram.
We decided to dig into a few of the platform’s many booming micro-economies. Fast Company talked to small business owners who eschew brick-and-mortar storefronts to sell their wares on Instagram instead, and artists who have never published their work anywhere other than the app, able to rely purely on Instagram for new commissions. We talked to the parents of toddler-aged influencers who rake in thousands per post, and bakers who sell boules exclusively through their DMs.
We’ll be publishing a story from a different corner of the Instagram economy every day this week. Read the first installment, about 2-year-old influencers who make more than you, here.