This analysis was first published in SvD Näringsliv, in Swedish, on June 13th, 2022. This piece was translated from Swedish by Claude. Some phrasing may differ from a human translation.
Suddenly seeing a lot of ads in your Instagram feed? It’s no coincidence. The photo app has become Mark Zuckerberg’s main weapon to turn the bad times around — and to take the fight to TikTok.
“The current plan is for Instagram to exist outside of Facebook for a long time to come,” Kevin Systrom said from a conference stage in Paris in 2012.
Systrom was one of Instagram’s co-founders, and had recently become financially independent. The deal — in which Systrom sold his photo app to Facebook for a billion dollars — had closed less than three months earlier. But what would happen now, on the inside of the social media giant?
For Systrom himself, the model he advocated was clear. “YouTube continued to be a separate product at Google,” he said. He had worked there himself and seen how the video service got to live its own life when it came to product decisions, offices and company culture. People who work at YouTube still feel like employees there — and not of the mothership Google, later renamed Alphabet.
Ten years later, one can note that the comparison didn’t hold up particularly well. YouTube has remained independent, but Instagram is very much woven into Meta, Facebook’s parent company. Both founders, Kevin Systrom and Mike Krieger, left the company several years ago after a conflict about precisely this.
Rather than being an independent satellite in the organisation, Instagram has become one of Meta’s strongest cards to play in trying to reverse the recent trend. Meta has been under heavy pressure on the market — the stock is down more than 45 percent this year — and, for the first time in a long while, faces tough competition from Chinese ByteDance and its video service TikTok.
What does that have to do with the ads and suggested content you might suddenly see appearing all over your Instagram feed? You get the picture when you listen to Meta’s outgoing chief operating officer, Sheryl Sandberg. During the Q&A with analysts on the most recent quarterly report, she said that “monetisation of stories continues to grow on both Facebook and Instagram. And with reels growing quickly, there’s also a big opportunity as we get better at monetising short-form video.”
Better monetisation for Meta usually means more ads for you.
Especially in the more video-heavy features of Instagram, the ones called “stories” and “reels”. And the fact that video is where the bets are being placed is no accident.
Reels — which exist on both Instagram and Facebook — is a feature with video in vertical format, where you scroll video by video. Sound familiar? It’s a near-identical clone of TikTok. At first glance it’s almost impossible to tell which service is which. And that, of course, is the point. Why switch to TikTok when Meta can bring a similar service to you — directly inside Instagram?
But changing Instagram’s user experience hasn’t been popular with everyone. On social media, complaints are spreading about the sheer volume of ads and how the photo app people once loved has been turned into something else entirely.
The question is what other choice Meta’s CEO, Mark Zuckerberg, has. There’s a straight line from your experience inside the app to Meta’s ad revenue.
Logical, but maybe not always desirable for every user.
The risk Meta now runs is annoying and losing the users it had to begin with. Even before its TikTok problems, Instagram was a huge traffic driver and an ad machine. It also solved Meta’s demographic problem, by being a separate product aimed more at younger users than the traditional blue app.
Messing with something this successful is risky. More than anything, it says something about the seriousness of the situation Meta finds itself in.
