More than half of all ads on Meta's Instagram ran in the service's short-form video Reels product in 2025, up from 35% in 2024, according to data from market intelligence firm Sensor Tower.
In the U.S., Reels accounted for 46% of time spent on the Instagram app in 2025, up from 37% in 2024, according to the data that Sensor Towered showed CNBC. On the Facebook app, that figure reached 29% in 2025, up from in 2024.
The shift highlights the growing role Reels plays in Meta's efforts to drive engagement and advertising revenue across its Instagram and Facebook services.
Vertical video continues to be a valuable artificial intelligence play for these social media platforms. Companies like as Meta, Google's YouTube and TikTok rely on recommendation systems powered by AI that surface personalized videos designed to keep users engaged for longer periods of time.
The platforms' value in AI tools comes from the ability to serve users relevant content, Neuberger Berman senior research analyst Dan Flax said.
"They're surfacing content to the user, and as they get more signals based on what the user watches ... that's helped their recommendation engines get better and you've seen it in the Reels revenue number," said Flax.
Advertisers have followed this trend, shifting their focus towards short-form video in the past year to reach more consumers on Reels.
"Legacy services are seeing ad volume shift away, with advertisers prioritizing more Reels to meet users where they are," Abraham Yousef, a senior insights analyst at Sensor Tower told CNBC.
But the rise of Reels has presented monetization challenges for Meta, as short-form video typically generates less revenue than Instagram's main feed. Meta CEO Mark Zuckerberg pointed out this trade-off during an earnings call in 2023 when Meta stopped paying creators directly for posting Reels.
"Currently, the monetization efficiency of Reels is much less than Feed," Zuckerberg said at the time. "So the more that Reels grows, even though it adds engagement to the system overall, it takes some time away from Feed and we actually lose money."
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