Instagram’s Working on a New Option That Would Simplify Reels Monetization for Creators

Instagram’s testing out a new process which could make monetizing Reels much easier, which could be key to holding onto top short-form talent as the competition heats up in the space.

As you can see in these examples, posted by app researcher Alessandro Paluzzi, Instagram is working on a new program that would enable creators to sign up to have overlay ads appear on their Reels clips.

The process would essentially enable Reels creators to include ads in their clips without them having to do any extra work – brands would be able to view eligible clips, then insert ads if they choose.

Which could be a big step, because while it would see ad content intrude on your Reels display, it could also facilitate direct monetization, generating income for creators without them having to organize their own brand deals and sponsorships.

Here’s the thing – short-form video monetization is hard, with the brief nature of the format making it much more difficult to build an equitable revenue share program – because you can’t just insert mid and pre-roll ads and have them intrinsically linked to the performance of each creators’ clips.

That remains the biggest threat to TikTok’s ongoing growth, because while TikTok needs to come up with more creative pathways to monetization, which require more effort on the part of the creator, YouTubers simply need to tick a box to become part of the YouTube Partner Program, where they can earn a lot more money without having to ‘sell their soul’, or even go to any extra effort.

You say you’re fine with ads showing in your videos (which YouTube’s going to insert anyway) and YouTube tracks your views and pays you relative to exposure. More views equals more money. Easy.

That’s not possible with short form clips, which is why this experiment is important, as it could provide a similar pathway to monetization, which simplifies the process on the creators’ behalf.

Right now, TikTok creators are unhappy with their revenue share, and fluctuating payouts from the platform’s Creator Fund – because TikTok can change the parameters at any time, and you can’t know, each month, how much money you might make from your TikTok clips.

Reels is in a similar boat – but if it can provide an easier path to monetization, that could keep more creators aligned to the option, as opposed to switching to YouTube and working to build a following there instead.

TikTok’s also working on various options, including Creator Marketplace to help brands find potential collaborators, its ‘Creative Exchange’ program to partner creators with brands, various eCommerce integrations and tools to display products alongside clips, and its Seller app in some regions which provides more options for listing product inventory to be shown in the app.

But all of these require extra effort on the part of creators to sign up to these programs, and organize brand deals.

This option could eliminate that effort, which could make Reels a more appealing prospect for revenue generation.

Though it won’t hold as much potential as YouTube’s Partner Program. And while Shorts is a lesser element within the YouTube app, the capacity for creators to promote their main channel via their Shorts clips remains a strong lure, which YouTube is looking to push as a means to both keep its top talent, and win over emerging TikTok creators.

That could eventually become a bigger problem for TikTok, if its most popular stars look to take their talents elsewhere, and their audiences with them. That’s what led to Vine’s demise, and while TikTok is now far bigger than Vine ever was, the same threat still looms over the app.

Building processes that make it as easy as possible for creators to monetize their content is key, and it’ll be interesting to see what type of response Instagram sees here, if indeed it does roll the program out to creators.