In 2025, more than half of all advertising placements on Instagram were served in short-form video Reels, up sharply from 35% in 2024, according to Sensor Tower. This milestone underscores Meta’s strategic pivot toward immersive vertical video as the primary vehicle for ad delivery on its flagship photo- and video-sharing service. The rapid reallocation of ad inventory to Reels has also pushed Instagram’s overall ad impressions higher, reflecting both client demand and platform prioritization of video format.

Sensor Tower data show that Reels accounted for 46% of total time spent on Instagram in the U.S. last year, rising from 37% the prior year. On Facebook’s mobile app, Reels-style clips comprised 29% of usage time in 2025, compared with a mid-20s share in 2024. Instagram’s daily active user base grew by 2% year-over-year, driven primarily by increased Reels consumption, suggesting that short-form video is more effective at retaining and extending session times.

Meta CEO Mark Zuckerberg has acknowledged that Reels produces lower revenue per engagement than Instagram’s traditional Feed, creating a short-term drag on monetization efficiency. While the shift toward Reels expands total ad inventory and engagement, it also cannibalizes higher-yield formats. This trade-off was highlighted when Meta ended direct creator payments for Reels in 2023, as executives worked to recalibrate the balance between user growth and unit economics.

Industry analysts note that Reels’ performance gains stem from advanced AI recommendation engines that tailor video feeds to individual users. Neuberger Berman senior research analyst Dan Flax estimates that improved signal collection on viewer preferences has elevated Reels’ ad revenue trajectory, contributing to Instagram and Facebook Reels surpassing a $50 billion annual run rate by late 2025. Investors will monitor Meta’s upcoming quarterly results for signs that AI-powered content surfacing continues to bolster advertiser spend and overall ad revenue growth.