Creators, influencers, and businesses all need to know how to monetize Instagram in today’s digital age or risk losing out on a tremendously valuable social media channel.

With over 2 billion users (Data Reportal, 2023), Instagram has evolved from a simple photo-sharing platform to a powerful marketing tool and revenue-generating machine. As the platform introduces new features and tools, understanding the intricacies of monetization becomes crucial.

This comprehensive guide delves deep into the official monetization strategies endorsed by Instagram, along with hidden gems and future predictions, ensuring you harness the full potential of this social media giant.

Official Blueprint: How to Monetize Instagram Directly from the Source

Instagram has introduced various tools for users to earn, from live badges to exclusive subscriptions. This section of the article highlights platform-endorsed strategies, explaining the potential and best practices to maximize earnings. If you’re wondering how to monetize Instagram, this guide provides the insights you need.

Bonuses on Instagram

Instagram bonuses offer a way for creators and businesses to earn. These bonuses, available to business and creator accounts, reward quality content and engagement. When eligible for bonuses, Instagram sends a notification, guiding users on bonus activation. However, as of March 9, 2023, Instagram stopped new and renewed Reels Play deals in the US and India. Existing deals remain valid until they expire.

 

How to monetize Instagram: Instagram bonuses

Source: Instagram

 

Types of Bonuses:

  • Reels Play: An invite-only program, Reels Play allows creators to earn based on the performance of their reels. The earnings per play might vary, and not all plays might count towards the bonus. Additionally, creators might earn based on the number of reels they produce or by creating themed reels in response to specific prompts.
  • Performance-Based Bonuses: These bonuses are tied to the performance of your content. For instance, you might earn more as you start and less over time, or you might need to achieve certain metrics to qualify.
  • Content Creation Bonuses: In some cases, Instagram might incentivize the creation of specific content, such as reels for an upcoming event or holiday.
  • Engagement Bonuses: These bonuses reward creators for genuine engagement, excluding inauthentic behaviors like fraudulent views.

Monetization Potential

Bonuses on Instagram present a direct monetization opportunity. After qualifying, earnings are calculated monthly. The amount varies based on the bonus type and content success. Regularly checking the professional dashboard helps track earnings. However, some content, like reels with third-party marks or fake engagement, might not qualify.

Badges on Instagram

Live badges, available to business and creator accounts, let creators earn from live content. During live sessions, supporters can buy badges, which are visible next to their usernames throughout the live video. Badges help supporters stand out and access features like a unique heart icon. Currently, Instagram takes no revenue, but Google and Apple charge 30% for in-app buys.

How to monetize Instagram: Screenshot of live with badges

Source: Instagram

Features of Badges:

  • Visibility and Recognition: Supporters who purchase badges will have their badges displayed next to their usernames, making them easily recognizable during the live session. This provides them with a sense of exclusivity and acknowledgment.
  • Multiple Badges: Supporters have the option to buy multiple badges in one live video. These multiple badges are represented with a + icon next to a special heart, indicating the total number of badges bought. However, payments from supporters who purchase multiple badges in a single live video are capped at $250 per supporter.
  • Special Interactions: Once badges are purchased, supporters receive a celebratory animation. Those who buy three or more badges will have their profile photo glow in bright purple, offering additional recognition. Creators are notified of the number of badges purchased by each supporter and can identify top supporters by the badge number next to their username.
  • Engagement Tools: Creators can pin comments from badge-purchasing supporters during their live sessions, making these comments visible to all viewers. Additionally, questions from badge supporters appear in a Q&A box, with those from the highest badge supporters prioritized at the top.

Monetization Potential

Badges provide a direct revenue stream for creators. With Instagram taking no share, earnings from badge sales can be maximized. The ability for supporters to buy multiple badges further amplifies the earning potential.

Also read: Instagram Live Badges: Everything You Need to Know

Instagram Subscriptions

This feature lets creators earn by offering exclusive content for a fee. It’s not yet available to everyone but promises enhanced engagement and earnings.

How to monetize Instagram: Screenshot of photo for IG story that can be shared to subscribers

Source: Instagram


Key Features of Instagram Subscriptions:

  • Diverse Exclusive Content: With Subscriptions, creators can roll out a variety of exclusive content, including:
    • Subscriber-specific Lives, Stories, and Reels.
    • Exclusive posts and badges for subscribers.
    • Dedicated broadcast and social channels for subscribers
  • Visibility and Engagement: Once a creator activates Subscriptions, their followers are notified, making it easy for them to opt-in. Moreover, subscribers are highlighted with a special badge, increasing their visibility in comments and interactions.
  • Content Prioritization: Subscriber stories are given precedence over regular stories. While subscriber posts receive a boost in personalized feeds, they might not always be at the forefront, ensuring a balanced content experience for all followers.

Monetization Potential

Subscriptions offer a way to capitalize on content. With no revenue share for Instagram, creators benefit fully from subscriber fees. The allure of exclusive content and perks ensures a steady and consistent income, enhancing the overall earning potential on the platform.

Instagram Branded Content

Branded content on Instagram refers to content for which creators have received compensation, either monetarily or through other valuable exchanges, by a business partner. It emphasizes transparency, ensuring clear partnership disclosures.

How to monetize Instagram: Paid partnership on InstagramSource: Instagram

Key Features of Branded Content on Instagram:

  • Disclosure Requirements: Creators are mandated (by Instagram as well as the FTC and other regulatory bodies) to tag the relevant brand or business partner when posting branded content. This includes situations where products or services have been provided for free.
  • Paid Partnership Label: This label, exclusive to the Instagram app, is a clear indicator of branded content. It helps users differentiate between regular posts and paid endorsements. When used, viewers will see “Paid partnership with…” above the posts.
  • Distinguishing Branded Content from Ads: While branded content showcases partnerships, they are distinct from the ads users typically see on Instagram. For promotional purposes, partnership ads can be created in Meta Ads Manager, provided the creator permits the promotion of their content.
  • Compliance with Policies: Before publishing branded content, creators must adhere to Instagram’s Branded Content Policies. This ensures that content maintains a standard of authenticity and transparency. The policies mandate that all users, whether on professional or personal accounts, tag business partners in their branded content when there’s a value exchange.

Monetization Potential

Branded content lets creators earn from endorsements. Clear disclosures maintain audience trust, and visibility can boost engagement, leading to more partnerships.

Ads in Instagram Profile Feed

Ads in the profile feed are a new way to monetize Instagram. It’s in testing and available to select creators. It offers a unique opportunity for creators to earn from the content they produce, as ads are seamlessly integrated into their profile feeds.

Key Features:

  • Ads Integration: Ads are strategically placed within the feed view of Instagram profiles. As users scroll through a profile’s content, they will encounter these ads interspersed between regular posts.
  • Control Over Monetization: Creators have the autonomy to decide which ads appear on their profile feed. They can also choose to opt out of this feature entirely. However, even without onboarding for monetization, ads will still be displayed in the profile feed.
  • Content Compatibility: This monetization method is compatible with all types of content posted to the Instagram grid, provided they adhere to Instagram’s Content Monetization Policies and don’t infringe on intellectual property rights.
  • Eligibility Criteria: To be eligible, creators must comply with Instagram’s Partner Monetization Policies, be at least 18 years old, and be based in the U.S.

Monetization Potential

Profile feed ads offer a revenue share from ad earnings. As it’s still new, earnings might change. However, it’s a promising way to earn from existing content. If you’re exploring how to monetize Instagram, this tool may allow you to monetize your most popular content.

Ads on Instagram Reels

Instagram has recently offered an Ads on Reels feature, providing a unique opportunity for creators to monetize their engaging reels. Ads on Instagram Reels allow for a broader reach to new audiences through image ads on Reels content. It ensures a smooth viewing experience via image ads directly on Reels content, without interrupting the person watching the Reel.

Key Features of Ads on Instagram Reels:

  • Performance-Based Payouts: Unlike traditional ad monetization models, the new payout system rewards creators based on the performance of their public reels, rather than the earnings from ads on their reels. This allows creators to focus on producing engaging content, while Instagram ensures an optimized ad experience for both advertisers and viewers.
  • Earning Potential: The initial payout model is based on the number of plays a reel receives. As the reel’s performance improves, so does the creator’s earning potential. Over time, other performance indicators may be integrated into the payout system.
  • Consistent Viewing Experience: This model ensures that viewers have a consistent and relevant ad experience, benefiting both creators and advertisers.

Monetization Potential

Ads on Reels present a promising way for creators to earn. By emphasizing content performance over ad revenue, consistent earnings become more achievable. For those wondering how to monetize Instagram, this is a significant step.

Instagram Gifts

Instagram has also recently included a Gifts feature exclusively available to eligible creators in the United States. It’s a method for creators to earn from their audience, where followers and non-followers can send virtual gifts on reels, showing appreciation.

How to monetize Instagram: gifts on reels

Source: Instagram

Key Features of Instagram Gifts:

  • Virtual Appreciation: Followers can purchase stars and use them to send virtual gifts to creators on their reels. Only the creators can view the gifts they receive.
  • Revenue Share: For every star received from fans, Instagram commits to providing creators with a revenue share equivalent to $.01 USD. Payments are made on a monthly basis.
  • Earnings Dashboard: Creators can monitor both their total and monthly approximate earnings via the Professional Dashboard. Payments are processed once the overall balance reaches $25, inclusive of earnings from other monetization initiatives.
  • Payout Account: Creators must set up a payout account to receive payments. If they don’t add a payout account within 5 months or if their earnings exceed $500, they lose the ability to monetize using Instagram Gifts. If they go 6 months without a payout account, they will forfeit any accumulated earnings. They can manage payout settings by tapping on “Payouts” in the professional dashboard.
  • Distinct from Other Features: “Instagram Gifts” for reels differs from “Instagram Badges”, a feature designed to monetize live video content.

Monetization Potential

Instagram Gifts provide a direct way to monetize reels. Receiving virtual gifts from the audience offers a transparent revenue model. Easy earnings access ensures creators know how to monetize Instagram effectively. This tool complements the other earning avenues on Instagram.

Hidden Gems: How to Monetize Instagram Beyond the Obvious

For those seeking to maximize earnings or leverage the platform, understanding how to monetize Instagram can reveal overlooked opportunities. This section will highlight these gems, designed for creators and brands, ensuring you confidently navigate Instagram’s monetization avenues.

For Creators

Collaborative Content Creation with Brands

Collaborative content creation isn’t just about sponsored posts. It’s about a partnership between the influencer and the brand where they work together to produce content. This collaboration varies based on the influencer’s audience and the brand’s goals.

Types of Collaborative Content:

  • Exclusive Product Launches: The influencer and brand co-create a product. For example, a beauty influencer might collaborate with a niche cosmetic brand to launch a limited-edition lipstick shade. The product is co-branded and promoted by both parties.
  • Story Takeovers: Instead of just showcasing a product, the influencer might “take over” the brand’s Instagram Stories for a day, offering insights, behind-the-scenes looks, or special promotions.
  • Content Series: The influencer and brand might produce a series of content together, such as a set of how-to videos, tutorials, or even a mini-documentary about the brand’s journey, emphasizing shared values.
  • Interactive Campaigns: Engaging the audience through challenges, contests, or Q&A sessions where both the influencer and brand are actively involved in content creation and audience engagement.
  • Educational Content: If the influencer has expertise in a particular area related to the brand’s niche, they might collaborate to produce webinars, workshops, or educational posts. For instance, a fitness influencer might work with a niche athletic wear brand to produce workout routines or health tips.

Monetization Potential

These collaborations can lead to deeper audience engagement. The content is unique and offers more than just product promotion. This can mean higher sales and more opportunities for both parties.

Hosting Virtual Events or Workshops via Instagram Live

Instagram Live is a feature that allows users to broadcast videos in real-time to their followers. Unlike pre-recorded videos that can be edited and curated, Live videos offer a raw, unfiltered experience. This feature offers a chance for influencers and brands to connect with their audience instantly and authentically.


Types of Virtual Events:

  • Q&A Sessions: One of the most common uses of Instagram Live is hosting Q&A sessions. This allows followers to ask questions in real-time, and the host can answer them on the spot. It’s an excellent way for influencers or brands to engage directly with their audience, address concerns, or provide insights.
  • Product Launches: Brands can use Instagram Live to unveil new products. The live format allows for real-time reactions, unboxing experiences, and immediate feedback from viewers.
  • Workshops and Tutorials: Whether it’s a makeup tutorial, cooking class, or a DIY craft session, Instagram Live can be used to host interactive workshops where viewers can follow along in real-time and ask questions.
  • Behind-the-Scenes: Offer a glimpse into the day-to-day operations, whether it’s a brand showing how products are made or an influencer sharing a day in their life.
  • Interviews and Collaborations: Host interviews with other influencers, experts in a field, or even fans. This not only diversifies the content but can also expand reach by tapping into the guest’s follower base.
  • Entertainment Sessions: Musicians can host mini-concerts, authors can do live readings, and artists can showcase their process – the possibilities are endless.

Monetization Potential

The potential for using Instagram Live is vast. Brands can promote products, influencers can get sponsorships, and exclusive content can be monetized outside Instagram. Badges on Instagram allow viewers to buy badges during a live video, creating a revenue stream. Furthermore, regular live sessions can boost engagement and visibility.

Dropshipping through Instagram

Dropshipping on Instagram is about selling without holding stock. When sold, the item is bought from a third party and sent to the customer. This means the seller doesn’t handle the product directly, making Instagram a perfect platform for showcasing and promoting these products.


How Dropshipping Works on Instagram:

  • Product Showcasing: Use Instagram’s visual platform to showcase products in a lifestyle setting, making them more appealing to potential buyers.
  • Instagram Shopping: With the integration of Instagram Shopping, users can click on a product in a post and be taken directly to a product page to make a purchase.
  • Engaging Stories: Use Instagram Stories to promote limited-time offers, flash sales, or showcase customer testimonials.
  • Influencer Collaborations: Partner with influencers to showcase products, tapping into their follower base for increased visibility.

Monetization Potential

Dropshipping offers direct sales opportunities. Users can buy directly from posts with sellers earning affiliate commissions. As a business grows, there’s potential for sponsored posts. Other brands, recognizing the influence and reach of a successful dropshipping profile, might offer payment for product promotions, further enhancing the monetization potential on Instagram.

Online Workshops and Masterclasses

Instagram has emerged as a platform for hosting educational sessions. Experts from various fields use Instagram to share their expertise and learn how to monetize their knowledge.

How Online Workshops and Masterclasses Work on Instagram:

  • Instagram Live: Host real-time sessions where users can join, interact, ask questions, and gain insights directly from experts.
  • Interactive Stories: Use polls, quizzes, and Q&A features in Stories to engage participants and make learning interactive.
  • Promotion through Posts: Use regular posts to announce upcoming workshops, share testimonials, and provide snippets of past sessions.

Monetization Potential

The majority of revenue generally comes from ticket sales, as creators can charge for access. They can use third-party ticketing platforms and promote links on Instagram. There’s also potential for brand collaborations – for example, a cooking masterclass might attract sponsorships from kitchenware brands, providing an added source of income. Affiliate marketing is another avenue – if a workshop or masterclass involves specific tools or products, creators can partner with relevant brands and earn a commission for every sale made through their referral, further diversifying their income streams on the platform.

Affiliate Shopping

One of the most promising avenues for businesses and influencers alike is the concept of Affiliate Shopping. This feature allows you to curate a virtual storefront where you can promote products from various brands and earn commissions on sales generated through your referrals.

How to monetize Instagram: affiliate shopping with commissions

Source: Instagram

How Affiliate Shopping works:

  • Shoppable Posts: Use Instagram’s native shopping feature to tag products in your posts. When users tap on these tags, they’re directed to an in-app product page with an option to purchase.
  • Shoppable Stories: Use the swipe-up feature in Stories to direct users to product pages.
  • Instagram Shop: A dedicated shopping space on your profile where users can browse through your curated collection of affiliate products.
  • Affiliate Links in Bio: While not directly a shop, many influencers use their bio link to direct followers to external affiliate storefronts or specific products.

Monetization Potential

Affiliate shopping offers commission earnings, where creators can earn from sales and sponsored content. They can also negotiate deals with brands and collaborate with other influencers. For example, by offering unique discounts or promotions to their followers, they can potentially secure higher commissions or even a flat fee for the promotion. Collaborating with other influencers or brands to cross-promote affiliate products can significantly increase visibility and, in turn, potential revenue.

For Brands

User-Generated Content (UGC) Campaigns

User-Generated Content, or UGC, includes content like photos, videos, and reviews made by users, not brands. This content speaks to a brand’s authenticity, as it originates from genuine users.

Types of UGC:

  • Product Reviews: Customers sharing their genuine experiences with a product, often showcasing its features or benefits.
  • Testimonials: Satisfied customers vouching for the brand, often sharing how a product or service positively impacted them.
  • Unboxing Videos: Users unveiling a product for the first time, capturing their genuine reactions and first impressions.
  • DIY and How-to Guides: Customers showcasing innovative ways to use a product, often revealing hacks or creative uses.
  • Photo and Video Shares: Users sharing visuals of them using or showcasing a product in real-life scenarios.
  • Story Mentions: Customers mentioning the brand in their Instagram stories, often with a shoutout or recommendation.

Monetization Potential

UGC isn’t a direct revenue source, but it has vast indirect potential. Here’s how:

  • Trust and Credibility: UGC serves as social proof, encouraging purchases.
  • Sponsored UGC: Brands can pay influencers for UGC.
  • Affiliate Programs: Users earn commissions from their UGC sales.
  • Exclusive Campaigns: UGC contests can drive sales and content creation.

Using UGC can boost a brand’s online presence. It offers authentic content and strengthens brand-community ties. Plus, algorithms favor genuine engagement, which can increase sales and loyalty.

Collaborative Content with Influencers

Influencers have a unique voice and a dedicated following. Collaborating with them offers brands a fresh perspective and a broader reach.


Types of Collaborations:

  • Behind-the-Scenes Access: Let influencers take over your Instagram for a day, offering followers a behind-the-scenes look into events, product launches, or the daily workings of your brand.
  • Product Development Insights: Collaborate with influencers during the product development phase. Their insights can be invaluable, and their involvement can create anticipation among their followers.
  • Co-Branded Limited-Time Offers: Launch products or offers in collaboration with influencers, blending both brand identities for a unique offering.

Monetization Potential

Influencer collaborations can boost sales. Joint ventures, especially limited-time ones, often see sales spikes. Additionally, collaborations introduce brands to new audiences, increasing visibility and long-term customer engagement.

Virtual Pop-Up Sales via Instagram Live

Instagram Live offers brands a platform to interact with their audience in real-time, making it perfect for virtual pop-up sales.

How to Execute:

  • Live Demos: Showcase how products work in real-time, answering queries and addressing concerns immediately.
  • Exclusive Discounts: Offer special discounts or deals exclusively for those tuning into the live session, creating urgency and boosting sales.
  • Engage with Viewers: Use the interactive nature of Live to engage with viewers, take polls, and get immediate feedback.

Monetization Potential

Virtual pop-up sales on Instagram Live can lead to immediate sales. The real-time nature and exclusive deals prompt quick purchases. Engaging live sessions can also convert viewers into loyal customers, ensuring long-term revenue.

Engage in Affiliate Partnerships

Affiliate partnerships are a win-win. Brands get more visibility, and partners earn commissions on sales.

How to monetize Instagram: screenshot of IG influencer with an affiliate code from Cult Beauty in her bio Source: Instagram

Benefits:

  • Extended Reach: By partnering with complementary brands or influencers, you tap into their audience base.
  • Unique Discount Codes: Offer special codes through affiliates, tracking sales and ensuring customers get a unique deal.
  • Trust Factor: Recommendations from trusted influencers or brands can significantly boost sales.

Monetization Potential

Affiliate partnerships can increase sales. Trusted endorsements combined with brand efforts can attract many customers.

Host Brand-Specific Instagram Challenges

Challenges can go viral on Instagram, creating massive brand visibility and engagement.

Steps to Launch:

  • Define the Challenge: It should be fun and interesting enough to draw interest and go viral and resonate with your brand message.
  • Promote: Use all your channels to promote the challenge, ensuring maximum participation.
  • Engage: Engage with participants, share the best entries, and keep the momentum going.

Monetization Potential

Viral challenges can increase brand visibility, indirectly boosting sales. If a challenge becomes popular, other brands might sponsor or collaborate, leading to direct revenue.

Exclusive Membership or Loyalty Programs

Loyalty programs can turn occasional customers into brand advocates.

Features:

  • Exclusive Content: Offer members unique content, be it tutorials, insights, or behind-the-scenes looks.
  • Early Product Access: Let loyal customers get their hands on new products before anyone else.
  • Special Discounts: Reward loyalty with exclusive discounts or deals, ensuring customers feel valued.

Monetization Potential

Charging for exclusive memberships can provide immediate income and create exclusivity. Loyal customers often buy more frequently and are more likely to try new products, increasing sales.

Future Predictions: Where is Instagram Monetization Heading?

The recent Meta Q2 2023 earnings call provided a wealth of insights into the future trajectory of Instagram’s monetization strategies. As the digital landscape continues to evolve, so does the potential for platforms like Instagram to harness the power of technology and innovation. Here’s a look at some of the key predictions based on the insights shared during the call:

AI-Driven Personalized Shopping Experiences

With Meta’s significant investments in AI, we can expect Instagram to leverage advanced AI techniques to offer more personalized shopping experiences. AI-recommended content, as mentioned in the conference call, is the fastest-growing category on Facebook’s feed. This trend will likely extend to Instagram, where AI will curate shopping feeds based on user preferences, behaviors, and interactions, making the shopping experience more intuitive and engaging.

Also read: Meta Finally Acts to Demystify Facebook and Instagram Recommendation Algorithms

Enhanced Business Messaging

The integration of Click-to-WhatsApp ads for Facebook and Instagram without needing a Facebook account is a significant step towards enhancing business messaging. This feature will likely be expanded, allowing businesses to optimize for conversions further down the funnel in messaging applications, thereby increasing revenue streams.

Augmented Reality (AR) Shopping

With the upcoming launch of the Quest 3 mixed reality headset and Meta’s commitment to the metaverse, we can anticipate a blend of AR and shopping on Instagram. Users might soon be able to try products virtually, be it clothing, makeup, or furniture, before making a purchase, revolutionizing the e-commerce experience.

How to monetize Instagram: Young Woman Using Virtual Reality Headset At Home, Sitting on a Couch, Shopping Online via VR Clothing Store. Evening Resting at Apartment, Choosing New Look

Enhanced Ad Tools Powered by AI

Products like Meta Advantage and Meta Lattice, which predict ad performance across various datasets, will become more integrated into Instagram’s advertising platform. These AI-powered tools, including automatic text variation and image outcropping, will provide advertisers with more sophisticated ad creation and optimization options.

Conclusion

Instagram’s monetization potential is vast and ever-evolving. From badges to branded content, the platform offers myriad opportunities for creators and businesses alike. As Instagram continues to innovate and integrate with the broader Meta ecosystem, it’s clear that the future holds even more exciting possibilities for monetization. Whether you’re an influencer, a brand, or just someone looking to make the most of your Instagram presence, staying updated and adaptable is key. Dive into the world of Instagram monetization, and you might just find a goldmine waiting to be tapped.

References