Beautiful Virgin Islands

Wednesday, Aug 27, 2025

Instagram Stories Already Generates 10% of Facebook's Ad Revenue

Instagram Stories Already Generates 10% of Facebook's Ad Revenue

Is there room for ad spending to keep growing on the popular feature?

Facebook didn't take long after it launched Instagram Stories in 2016 before it started inserting advertisements into the app's new feature. Facebook saw strong enough engagement that it felt confident enough to do so. About three years later, Instagram Stories has over 500 million daily active users and accounts for 10% of ad spending on Facebook's platforms, according to research from Socialbakers released this week.

The social media marketing company found ad spend on Instagram Stories increased nearly 70% year over year in its latest quarterly report. Facebook's overall ad revenue growth came in at 28%.

There is no doubt Stories has been a key driver for Facebook's revenue growth over the last few quarters. Now, as a significant contributor to the tech company's total revenue, investors need to consider whether Instagram Stories ad spend will continue to grow at a pace well over twice as fast as the rest of Facebook.


What's behind the growth?

So far Instagram Stories' ad spend has been fueled by an increase in ad load. Facebook increased ads in Instagram Feed and Stories in the second half of last year, according to CFO Dave Wehner. When it comes to Instagram Feed, Wehner has made comments that the company's not comfortable increasing ad loads further. It's less clear whether there's room to increase ad impressions per minute of engagement on Stories.

Growing revenue through increasing ad loads is the lowest-hanging fruit for Facebook. That said, it needs to be careful with its ad load increases, as it must balance it with engagement. Too many ads will negatively impact engagement, which is another way - a more sustainable way - to grow ad impressions.

Facebook hasn't provided an update on Instagram Stories' daily active users since the start of the year when it said it had 500 million daily active users during its fourth-quarter earnings call. It's not clear whether Facebook has seen a slowdown in growth or it's consciously holding back that number from the public for another reason. But with less room to increase ad load, engagement growth will remain an important factor for Stories to keep growing.

All that said, Wehner believes Facebook still has a ways to go before it maxes out ads impressions from Stories. "The impression growth is really the story for Stories, and will remain the story, we think, for the near future. So that will not be a price-driven revenue growth story, but rather an impression growth revenue growth story," he said during the company's third-quarter earnings call.


Room to increase pricing

Facebook has followed this playbook before. With its Facebook News Feed product it eventually saturated the percentage of sponsored posts it could show without degrading the experience and losing engagement.

But even after saying it had no room to increase ad load in News Feed, it saw considerable revenue growth due to strong increases in average ad price. What's more, it continues to see increases in impressions as users continue to spend more time in News Feed.

That bodes well for the long-term growth of Stories. Management has been very clear about the pricing gap between Stories ads and Feed ads. With more ad impression growth coming from Stories than Feeds, average ad price has declined slightly in each of the last four quarters.

Ultimately, Facebook should be able to drive considerable revenue growth from increased average price for Stories ads when supply stops growing as quickly and demand continues to increase. So far, Facebook only has 3 million of its 7 million active advertisers spending any of their budgets on Stories ads.

It's worth pointing out that Facebook is still growing its ad revenue at a healthy pace outside of Stories ads. Non-Instagram-Stories ad revenue grew approximately 25% year over year in the third quarter, based on Socialbakers' data. That goes to show that even after picking the low-hanging fruit, Facebook is able to grow ad spend relatively well thanks to the increasing shift in ad budgets to digital advertising. Stories ads still have a lot of revenue growth left and they're already having a meaningful impact on Facebook's top-line results.

Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
Manhunt in Australia: Armed Anti-Government Suspect Kills Police Officers Sent to Arrest Him
China Launches World’s Most Powerful Neutrino Detector
How Beijing-Linked Networks Shape Elections in New York City
Ukrainian Refugee Iryna Zarutska Fled War To US, Stabbed To Death
Elon Musk Sues Apple and OpenAI Over Alleged App Store Monopoly
2 Australian Police Shot Dead In Encounter In Rural Victoria State
Vietnam Evacuates Hundreds of Thousands as Typhoon Kajiki Strikes; China’s Sanya Shuts Down
UK Government Delays Decision on China’s Proposed London Embassy Amid Concerns Over Redacted Plans
A 150-Year Tradition to Be Abolished? Uproar Over the Popular Central Park Attraction
A new faith called Robotheism claims artificial intelligence isn’t just smart but actually God itself
Deputy Prime Minister Angela Rayner Purchases Third Property Amid Housing Tax Reforms Debate
HSBC Switzerland Ends Relationships with Over 1,000 Clients from Saudi Arabia, Lebanon, Qatar, and Egypt
Sharia Law Made Legally Binding in Austria Despite Warnings Over 'Incompatible' Values
Italian Facebook Group Sharing Intimate Images Without Consent Shut Down Amid Police Investigation
Dutch Foreign Minister Resigns Amid Deadlock Over Israel Sanctions
Trump and Allies Send Messages of Support to Ukraine on Independence Day Amid Ongoing Conflict
China Reels as Telegram Chat Group Shares Hidden-Camera Footage of Women and Children
Sam Nicoresti becomes first transgender comedian to win Edinburgh Comedy Award
Builders uncover historic human remains in Lancashire house renovation
Australia Wants to Tax Your Empty Bedrooms
MotoGP Cameraman Narrowly Avoids Pedro Acosta Crash at Hungarian Grand Prix
FBI Investigates John Bolton Over Classified Documents in High-Profile Raids
Report reveals OpenAI pitched national ChatGPT Plus subscription to UK ministers
Labour set to freeze income tax thresholds in long-term 'stealth' tax raid
Coca‑Cola explores sale of Costa coffee chain
Trial hears dog walker was chased and fatally stabbed by trio
Restaurateur resigns from government hospitality council over tax criticism
Spanish City funfair shut after serious ride injury
Suspected arson at Ilford restaurant leaves three in critical condition
Tottenham beat Manchester City to go top of Premier League
Bank holiday heatwave to hit 30°C before remnants of Hurricane Erin arrive
UK to deploy immigration advisers to West Africa to block fake visas
Nurse who raped woman continued working for a year despite police alert
Drought forces closures of England’s canal routes, canceling boat holidays
Sweet tooth scents: food-inspired perfumes surge as weight-loss drugs suppress appetites
Experts warn Britain dangerously reliant on imported food
Family of Notting Hill Carnival murder victim call event unmanageable
Bunkers, Billions and Apocalypse: The Secret Compounds of Zuckerberg and the Tech Giants
Ukraine Declares De Facto War on Hungary and Slovakia with Terror Drone Strikes on Their Gas Lifeline
Animated K-pop Musical ‘KPop Demon Hunters’ Becomes Netflix’s Most-Watched Original Animated Film
New York Appeals Court Voids Nearly $500 Million Civil Fraud Penalty Against Trump While Upholding Fraud Liability
Elon Musk tweeted, “Europe is dying”
Far-Right Activist Convicted of Incitement Changes Gender and Demands: "Send Me to a Women’s Prison" | The Storm in Germany
Hungary Criticizes Ukraine: "Violating Our Sovereignty"
Will this be the first country to return to negative interest rates?
Child-free hotels spark controversy
North Korea is where this 95-year-old wants to die. South Korea won’t let him go. Is this our ally or a human rights enemy?
Hong Kong Launches Regulatory Regime and Trials for HKD-Backed Stablecoins
China rehearses September 3 Victory Day parade as imagery points to ‘loyal wingman’ FH-97 family presence
Trump Called Viktor Orbán: "Why Are You Using the Veto"
×