How Does Instagram Make Money?

Is Instagram free?

Yes, Instagram is free.  You don't have to pay any money to do any of these things on Instagram (among other things):

  • Download the Instagram app

  • Register for an account

  • Follow other users

  • Add or edit photos

  • Like or comment on other people's photos

Alright, then how does Instagram make money?

Instagram makes the bulk of its money the same way that Facebook, its parent company, does -- advertising.  It will sometimes show you "sponsored" posts on your Instagram feed, even if you aren't a follower of the company that authored the post.

How does Instagram's advertising work?

Well, there was a time a few years ago when Instagram's terms of service were changed to make it look like they could sell your photographs to advertisers for them to use as they saw fit without compensating you.  A lot of people were not happy with that decision, and complained to Instagram.  Instagram has since backed down from that policy, and reassured Instagram users that they retain the rights to their content.

You can read more about the story here.

Now, Instagram's terms of service declare that:

Instagram does not claim ownership of any Content that you post on or through the Service. Instead, you hereby grant to Instagram a non-exclusive, fully paid and royalty-free, transferable, sub-licensable, worldwide license to use the Content that you post on or through the Service, subject to the Service's Privacy Policy...

Okay, so Instagram can't do anything with your information outside of what its Privacy Policy states.  So, then, what does its privacy policy say?  Here's an excerpt on what Instagram says they can (or can't) do with your information:

  • We will not rent or sell your information to third parties outside Instagram (or the group of companies of which Instagram is a part) without your consent, except as noted in this Policy.

  • We may share User Content and your information (including but not limited to, information from cookies, log files, device identifiers, location data, and usage data) with businesses that are legally part of the same group of companies that Instagram is part of, or that become part of that group ("Affiliates")... But these Affiliates will honor the choices you make about who can see your photos.

  • We may also share certain information such as cookie data with third-party advertising partners. This information would allow third-party ad networks to, among other things, deliver targeted advertisements that they believe will be of most interest to you.

  • We may remove parts of data that can identify you and share anonymized data with other parties. We may also combine your information with other information in a way that it is no longer associated with you and share that aggregated information.

So, in a nutshell, Instagram won't sell any information to advertisers that could personally identify you on its own.  However, they may sell anonymous information about how you use the website, such as who you follow or comment on, or where you access Instagram from.  Advertisers may use this information to display advertisements to you on Instagram that supposedly correspond to your location or interests.

See our Privacy Policies and Tracking and Sale of Internet Usage Data articles for more information about how companies like Instagram collect and use information to sell advertising space.

 

Anyway, that's a little bit about how Instagram makes their money!

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