Getty
Facebook CEO Mark Zuckerberg.
- Instagram Stories revenue is being modeled to grow even faster than Facebook's mobile revenues did in the early 2010s.
- The company is in the midst of a big shift to Stories-based sharing, and new financial estimates from Nomura are a vote of confidence in its success.
- Instagram Stories may pull in $7.5 billion in revenue for Facebook in 2021, according to the investment firm.
Mark Zuckerberg is gambling that the future of sharing on Facebook lies in ephemeral, auto-deleting photos - and it sounds like the bet is already starting to pay off.
Over the last year or so, Facebook has leaned heavily into "Stories": A sharing format stolen from Snapchat that lets users post photos and videos that auto-delete after a day. A new research note from Nomura analyst Mark Kelley suggests that the shift away from the traditional, scandal-ridden News Feed is going even faster than expected, and is analogous to Facebook's shift to mobile in the early part of the decade that ultimately saw profits boom.
Transform talent with learning that worksCapability development is critical for businesses who want to push the envelope of innovation.Discover how business leaders are strategizing around building talent capabilities and empowering employee transformation.Know More "The transition to Stories is occurring at a much faste rate than we initially anticipated," Kelley wrote, even as "core Facebook user trends have surprised us to the upside." He estimates Instagram Stories alone brought in $750 million in advertising revenue in 2018 - and is predicting $2.2 billion for 2019, and $7.5 billion in 2021.
Facebook began inserting ads into Instagram Stories in March 2017, and followed up with Stories ads in the core Facebook app in September 2018.
If Nomura's numbers prove accurate, the compound annual growth rate of revenue for Instagram Stories over the next few years will be even greater than that of Facebook's mobile revenue between 2013 and 2016.
Nomura
Nomura's predictions for revenue growth of Instagram Stories as compared to Facebook's mobile revenue from 2013 onwards.
Kelley added: "We've also heard anecdotally from advertisers that budgets continue to grow at the corporate level, with spend being reallocated to Stories rather than Feed, and early feedback has been positive."
The vote of confidence will be a welcome piece of good news from Facebook, which has faced a difficult two years from a public relations perspective. It has lurched from scandal to scandal - one month being implicated in the spread of hate speech that fueled genocide in Myanmar, the next admitting a hack of tens of millions of users' sensitive data.
But Nomura suggests that Facebook is now at a point of scandal fatigue, with crises failing to do much damage: "On the whole, we do think the negative headwinds have largely been exhausted, with little reaction to negative press as of yet."
Do you work at Facebook? Contact this reporter via Signal or WhatsApp at +1 (650) 636-6268 using a non-work phone, email at rprice@businessinsider.com, Telegram or WeChat at robaeprice, or Twitter DM at @robaeprice. (PR pitches by email only please.) You can also contact Business Insider securely via SecureDrop.
Next Story
Colon cancer rates are rising in young people. If you have two symptoms you should get a colonoscopy, a GI oncologist says.
I spent $2,000 for 7 nights in a 179-square-foot room on one of the world's largest cruise ships. Take a look inside my cabin.
An Ambani disruption in OTT: At just ₹1 per day, you can now enjoy ad-free content on JioCinema
In second consecutive week of decline, forex kitty drops $2.28 bn to $640.33 bn
SBI Life Q4 profit rises 4% to ₹811 crore
IMD predicts severe heatwave conditions over East, South Peninsular India for next five days
COVID lockdown-related school disruptions will continue to worsen students’ exam results into the 2030s: study
India legend Yuvraj Singh named ICC Men's T20 World Cup 2024 ambassador
