Choosing and Launching an Additional Revenue Stream for Instagram
Company: Meta
Role: Product Manager
Category: Product Design & Strategy
Difficulty: medium
Interview Round: Other
You are a product manager at Instagram and have been asked to find a new way for the app to make money. Propose one monetization strategy, explain why you would pick it over the other options you considered, and describe how you would launch it and measure whether it works.
```hint Who could pay, and for what
Instagram has viewers, creators and businesses. Think about what each group values enough to pay for, then test each idea against what it would do to the ad business that already pays for the app.
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### Clarifying Questions
- Should the strategy build on an existing surface such as Stories, Reels, Live or messaging, or can it be an entirely new product?
- Is the goal near-term revenue, a revenue stream that reduces dependence on ads, or revenue that also gives creators more reason to stay?
- Which payers are in scope: consumers, creators, businesses, or any of them?
- Are there constraints to respect, such as app store payment rules, regional regulation, or a limit on how much engagement or ad impressions may drop?
### What a Strong Answer Covers
- A map of Instagram's possible payers (viewers, creators, businesses) and models (subscriptions, transaction fees, paid tools, ads), and how each interacts with the existing ad business.
- An evaluation of several options on revenue potential, value to users and creators, cannibalization of ads and effort, ending in one clear recommendation.
- A concrete design of the chosen strategy: who pays, what they get, pricing and Instagram's share, and how it reaches users.
- Success metrics with guardrails on engagement, ad revenue, creator retention and trust and safety.
- Risks such as platform fees, regulation, abuse and user backlash, with mitigations and a staged launch.
### Follow-up Questions
- Your strategy adds revenue, but users see fewer ads and spend less time in Feed. How do you decide whether the trade is worth it?
- How would you set the price and Instagram's share, and how would you test them?
- What could make the strategy fail with creators even if users like it?
Overview: A product strategy question that asks a PM to propose and defend a new way for Instagram to make money. It tests mapping who could pay and for what, weighing options against cannibalization of the ad business, designing the chosen model with pricing and a launch plan, and choosing revenue metrics with engagement and safety guardrails.