Most of Instagram's ads ran on Reels in 2025, data shows

In a remarkable shift in advertising trends, over half of all ads on Meta's Instagram were featured in the platform's short-form video segment, Reels, throughout 2025. This represents a significant increase from 35% in 2024, as reported by market intelligence firm Sensor Tower. The rising popularity of Reels is evident, with users dedicating 46% of their time on Instagram to this feature, a notable rise from 37% the previous year. Similarly, Facebook's app saw Reels account for 29% of user engagement, also up from the prior year. This transformation underscores the pivotal role Reels plays in Meta's strategy to enhance both user engagement and advertising revenue across its platforms. Vertical video content is becoming increasingly crucial, with Meta, Google’s YouTube, and TikTok leveraging AI-driven recommendation systems to present personalized videos that keep users captivated for extended periods. According to Dan Flax, a senior research analyst at Neuberger Berman, the key to these platforms’ success lies in their ability to deliver relevant content to users, improving their recommendation algorithms over time. As advertisers adapt to these changes, there has been a noticeable shift towards short-form video content to effectively connect with consumers on Reels. Abraham Yousef, a senior insights analyst at Sensor Tower, noted that traditional advertising formats are seeing a decline as brands prioritize Reels to engage audiences where they are most active. However, this surge in Reels usage has posed monetization challenges for Meta. Short-form videos typically generate lower revenue compared to traditional Instagram feeds. During a 2023 earnings call, Meta CEO Mark Zuckerberg highlighted this dilemma, explaining that while Reels boosts overall engagement, it can detract from the higher revenue generated by the main feed. Despite these challenges, the data indicates that overall activity on Instagram is rising, with daily active users increasing by 2% since last year, spurred by the popularity of Reels. Analysts believe that the growing viewership on Reels could still lead to higher advertising revenue for Meta. Flax pointed out that even as advertisers shift some of their budgets from the feed to Reels, the total ad spending with Meta remains on the rise. In October, Zuckerberg announced that the combined annual revenue for Instagram and Facebook Reels had surpassed an impressive $50 billion run rate, and the upcoming fourth-quarter and full-year results for 2025, set to be released on January 28, will be closely monitored for growth insights. Launched in August 2020 in response to TikTok's rising popularity, Reels was integrated into Facebook the following year. As of last September, Instagram celebrated a milestone of 3 billion monthly active users since its acquisition in 2012 for $1 billion. As Reels continues to dominate user and advertiser interactions, questions remain about its ability to maintain this lead amid fierce competition from TikTok and YouTube's similar offering, Shorts. In a move to further expand Reels’ reach, Meta introduced an Instagram TV app for Amazon Fire TV, allowing users to enjoy Reels on their televisions. Flax commended Meta for its progress with Reels, particularly in enhancing its recommendation engines, suggesting a bright future for the feature. While Instagram's share of the market continues to grow year-over-year, Sensor Tower's data indicates that YouTube's watch time for Shorts remained flat last year. Nevertheless, YouTube still surpasses both Instagram and TikTok in mobile user engagement, with daily active users in the U.S. rising by 3% in 2025. However, TikTok retains the lead in user time spent, averaging 81 minutes per day, compared to 80 minutes on YouTube and 55 minutes on Instagram. This evolving landscape positions algorithm-driven vertical video as a critical battleground for social media companies aiming to attract users, sell advertising, and drive sustainable growth.