Saudi Press

Saudi Arabia and the world
Friday, Aug 22, 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

Saudi Press
0:00
0:00
Close
Dogfights in the Skies: Airbus on Track to Overtake Boeing and Claim Aviation Supremacy
Tim Cook Promises an AI Revolution at Apple: "One of the Most Significant Technologies of Our Generation"
Are AI Data Centres the Infrastructure of the Future or the Next Crisis?
Miles Worth Billions: How Airlines Generate Huge Profits
Zelenskyy Returns to White House Flanked by European Allies as Trump Pressures Land-Swap Deal with Putin
Beijing is moving into gold and other assets, diversifying away from the dollar
Cristiano Ronaldo Makes Surprise Stop at New Hong Kong Museum
Zelenskyy to Visit Washington after Trump–Putin Summit Yields No Agreement
High-Stakes Trump-Putin Summit on Ukraine Underway in Alaska
Iranian Protection Offers Chinese Vehicle Shipments a Cost Advantage over Japanese and Korean Makers
Saudi Arabia accelerates renewables to curb domestic oil use
Cristiano Ronaldo and Georgina Rodríguez announce engagement
Asia-Pacific dominates world’s busiest flight routes, with South Korea’s Jeju–Seoul corridor leading global rankings
Private Welsh island with 19th-century fort listed for sale at over £3 million
Sam Altman challenges Elon Musk with plans for Neuralink rival
Australia to Recognize the State of Palestine at UN Assembly
The Collapse of the Programmer Dream: AI Experts Now the Real High-Earners
Armenia and Azerbaijan to Sign US-Brokered Framework Agreement for Nakhchivan Corridor
British Labour Government Utilizes Counter-Terrorism Tools for Social Media Monitoring Against Legitimate Critics
WhatsApp Deletes 6.8 Million Scam Accounts Amid Rising Global Fraud
Nine people have been hospitalized and dozens of salmonella cases have been reported after an outbreak of infections linked to certain brands of pistachios and pistachio-containing products, according to the Public Health Agency of Canada
Texas Residents Face Water Restrictions While AI Data Centers Consume Millions of Gallons
Tariffs, AI, and the Shifting U.S. Macro Landscape: Navigating a New Economic Regime
India Rejects U.S. Tariff Threat, Defends Russian Oil Purchases
United States Establishes Strategic Bitcoin Reserve and Digital Asset Stockpile
Thousands of Private ChatGPT Conversations Accidentally Indexed by Google
China Tightens Mineral Controls, Curtailing Critical Inputs for Western Defence Contractors
OpenAI’s Bold Bet: Teaching AI to Think, Not Just Chat
BP’s Largest Oil and Gas Find in 25 Years Uncovered Offshore Brazil
JPMorgan and Coinbase Unveil Partnership to Let Chase Cardholders Buy Crypto Directly
British Tourist Dies Following Hair Transplant in Turkey, Police Investigate
WhatsApp Users Targeted in New Scam Involving Account Takeovers
Trump Deploys Nuclear Submarines After Threats from Former Russian President Medvedev
Germany’s Economic Breakdown and the Return of Militarization: From Industrial Collapse to a New Offensive Strategy
IMF Upgrades Global Growth Forecast as Weaker Dollar Supports Outlook
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
President Trump Diagnosed with Chronic Venous Insufficiency After Leg Swelling
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
"Can You Hit Moscow?" Trump Asked Zelensky To Make Putin "Feel The Pain"
Nvidia Becomes World’s First Four‑Trillion‑Dollar Company Amid AI Boom
Iranian President Reportedly Injured During Israeli Strike on Secret Facility
Kurdistan Workers Party Takes Symbolic Step Towards Peace in Northern Iraq
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
AI Raises Alarms Over Long-Term Job Security
Saudi Arabia Maintains Ties with Iran Despite Israel Conflict
Russia Formally Recognizes Taliban Government in Afghanistan
×