According to the second quarter of 2025 newspaper released by Meta, company advertising revenues amounted to $46,560 million, which exceeded market expectations and largely benefited from the strong performance of the Instagram Reels short video business. According to the financial statements, Reels ‘ viewing time increased by 20 per cent each year, and its innovative advertising patterns have significantly improved the effect of advertising.
Reels ‘ viewing time increased by 20 per cent each year, accounting for nearly 40 per cent of the total time spent by Instagram. Its short video format attracts young users and enhances user viscosity, while new advertising models (e.g. interactive Reels advertising and primary shopping) significantly increase conversion rates. The agency expected that, by the end of 2025, Instagram would have generated $32.03 billion in advertising revenues on the United States market, surpassing Facebook for the first time, becoming the core driver of Meta advertising revenues.
Meta optimized its advertising algorithm with its open-language model, Llama 4, especially with regard to precision positioning and dynamic creativity generation. This helped advertisers achieve higher hits (CTR) and investment returns (ROI) on Reels. Meta reports that the number of active users of the Global Day reached 3.31 billion, an increase of 7 per cent over the previous year, and 3.96 billion per month. Instagram grew by 8.5 per cent each day and became the main source of growth for users.
Instagram Reels has become the core weapon of Meta against TikTok since its launch in 2020. Reels introduced “sliding interaction” and “immediate purchase” advertisements, allowing users to complete their purchases directly in video, which increased conversion efficiency. Meta reported that the rate of conversion of Reels advertising was 15 per cent higher than the traditional feed advertising. In the Asia-Pacific and North American markets, Reels increased its advertising revenues by 28 per cent and 22 per cent, respectively, benefiting from localized content and the active participation of regional advertisers.
The success of Reels proves that short video has become a preferred channel for advertisers to attract young users. eMarketer predicts that short video advertising will account for more than 30 per cent of global digital advertising expenditure by 2026. The transition of Instagram from static content platforms to short video and electric generators has opened up new sources of revenue for Meta. Instagram ‘ s electrician revenue (including Reels shopping advertisements) is expected to account for 20 per cent of its total revenue in 2025.
Meta expects revenues to reach $40 billion to $42.5 billion in the third quarter of 2025, an increase of 16 to 23 per cent over the same period, and plans to continue to increase investments in AI and Reels. Chief Executive Officer Mark Zuckerberg stated during the financial teleconference that the growth potential of Reels had not yet been fully released and that it would be further enhanced in the future by enhancing the AI recommended algorithm and expanding the global market.