Sensor Tower data shows that in 2025 over 50% of all Instagram advertisements ran within Reels, up sharply from 35% in 2024. This shift underscores Meta’s strategic pivot toward short-form video, with advertisers increasingly reallocating budgets to tap into higher user engagement on Reels. According to Sensor Tower’s U.S. breakdown, Reels accounted for 46% of total time spent on Instagram—versus 37% a year earlier—and captured 29% of time spent on Facebook, highlighting the product’s growing footprint across Meta’s social platforms.

Daily active user growth on Instagram was driven largely by Reels consumption, with Sensor Tower reporting a 2% overall increase in Instagram’s daily active user base since 2024. Vertical video formats powered by AI-driven recommendation algorithms continue to extend session lengths and boost content discovery, according to Neuberger Berman analyst Dan Flax. He noted that as recommendation engines refine their predictions, engagement on vertical video products like Reels strengthens, creating a virtuous cycle that further attracts advertising dollars.

Meta CEO Mark Zuckerberg has previously cautioned that while Reels boosts engagement, its monetization efficiency remains below that of the traditional Instagram feed. During the 2023 earnings call, he pointed out that expanding Reels viewership can cannibalize feed revenue in the short term. Nevertheless, total Reels and feed advertising generated a combined annual run rate exceeding $50 billion by October 2025, and analysts expect that overall ad revenue will rise as advertisers continue shifting toward short-form video. Investors will be watching Meta’s full-year 2025 results—due Jan. 28—to assess the net impact of Reels’ rapid growth on the company’s advertising profitability.