Facebook acquired Instagram in 2012 and received a great deal of criticism because of it. Critics felt that the $1 billion purchase was poorly informed, considering the photo sharing social platform was producing zero revenue from its user base at the time. During that time, Facebook wasn’t doing so hot either, with their trading at an all-time-low.
But since then, Facebook has made a tremendous comeback and Instagram is undoubtedly part of this upswing. Over the course of the past year, the company’s shares have risen nearly 33%.
Recently, Instagram’s algorithm changed, making its timeline switch from reverse-chronological to an algorithm-based feed that shows users content based on interaction history and photo popularity. This change takes a page out of Facebook’s book, as the social media giant underwent this change already, resulting in increased engagement and user growth.
And in a recent blog post by Instagram, the company pointed out that the average Instagram user misses 70% of their feeds; considering that 880 billion photos were taken in 2014 alone, many of which were uploaded to social media, this comes as no surprise. That being said, the new system results in a better, more well-curated experience.
But not everyone felt as hunky dory about the algorithm changes, as the changes will likely come at the expense of brands that use the photo sharing tool. Eat24, for example, deleted its Facebook page in protest of the Instagram changes and wrote a “break-up letter” to Facebook, accusing them of intentionally limiting the company’s ability to reach audience members organically and instead asked them to pay for promoted posts.
Regardless of whether or not brands are getting the short end of the stick, the algorithm-based timeline will encourage more ad spending from brands. And this kind of thinking has worked in Facebook’s favor in the past, as increased engagement and ad spending helped the company grow 44% in the last fiscal year.