Instagram ads coming to IGTV with revenue sharing for influencers

Adam Mosseri, Facebook

Beck Diefenbach | Reuters

Instagram, owned by Facebook, announced on Wednesday that it would start running ads on its IGTV video app and would share the earnings from those ads with influencers who create videos for the service.

The move adds another channel where Facebook can serve ads to its nearly 3 billion monthly active users and increases the amount of revenue that Instagram contributes to Facebook’s advertising activities. In 2019, Instagram generated approximately $ 20 billion in advertising, more than 25% of Facebook’s overall revenue, according to Bloomberg.

Instagram will share at least 55% of the revenue from these ads with creators, which should encourage more influencers to create material for IGTV. This business model has proven to be successful for other platforms, including Google-owned YouTube.

“We are committed to making IGTV an effective and safe advertising space for the brand, so that we can help creators make money and connect people with great products,” the company said in a blog post.

Facebook launched IGTV in June 2018 as a fallout from Instagram where users can watch longer videos designed for mobile devices. Users can access IGTV videos directly via Instagram or the standalone IGTV app.

The ads will start appearing next week and last no more than 15 seconds, said Instagram. The company will experiment with the formatting details, for example, if it will allow users to ignore the ads.

The company will initially limit the deployment to a few advertisers and influencers in the United States. Instagram has not specified how exactly the revenue will be shared with influencers.

Instagram has also announced that it will test users’ ability to purchase virtual “badges” during influencer livestreams to show support. (Amazon’s live game streaming service, Twitch, already has similar functionality.)

For example, a badge may appear as a small heart symbol next to a person’s name. This person’s comments will appear more prominently and influencers will see a list of all the badge holders who have made the donation to them. The badges will cost 99 cents, $ 1.99 or $ 4.99, and initially all the money will go to the influencer.

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