Social media are nothing but a large online playground, where people post pictures, and videos and tell their friends. Facebook is all the rage, but did you know that it also makes a ton of money?
Facebook generated billions of 135 billion $ in social media revenue last year. Businesses promote on social media, sell products and have followers all around the world. Learn why social media is so rich and what it can do
Making Money from Ads
Most commonly, social media makes money via ads. You know those little messages that pop up under your search results saying by this ad, well in case you are wondering an Ad is short for Advertisement.
You saw ads in between videos on YouTube, scrolled through Instagram and saw an ad while playing a new game that you downloaded to play (after seeing an advertisement for the same).
Companies spend a lot of money on advertisements to be shown on social media because it is an effective way to track the people who might have an interest in getting their stuff.
For example, if a company is about to launch new toys in the market e.g., they can pay social media platform where kids and parents loving toys commute frequently. More ads get out in front of more eyeballs, which leads to potential sales or toys. Continue reading here: How Social Media Makes Money (Literally!)
Selling Products Directly
Several social media apps and websites have shopping capabilities built directly into their platforms. On Facebook and Instagram (and elsewhere), you’ll see posts featuring clothes, toys or whatever else that are just too cool not to click through and buy immediately. Social commerce, or shopping right from your phone without stepping foot in a store.
So when people buy things, these social media websites may take a little part of that money and frankly it becomes a large amount because too many people use these apps every day. This makes more money for social media.
Paying for Extra Features
The apps are generally free to download and use, but some features within the app may need extra tools or in-app purchases. Games or special effects in apps like Snapchat are a basic example of this, where you can pay for extra filters. These are referred to as in-app purchases.
These extra features are the things that people pay for and it makes using their app funnier. Social media also earns money through subscriptions. YouTube and some other applications have been offering paid alternatives to watch videos without commercial breaks.
This is known as a subscription service and serves the dual purpose of helping how social media make money out of those willing to pay for some more.
For big platforms, the numbers are BIG.
Among the biggest social media companies are Facebook, Instagram, YouTube and Twitter but also newcomers like TikTok. And they generate billions of dollars annually with their platforms. In total, these platforms made billions of dollars last year! Facebook derived a majority of its revenue from ads, while YouTube profited both from ad revenues and paid subscriptions.
Short video titan TikTok also made a killing through advertisements and in-app sales. After all, small bits of money from millions of people using these platforms daily result in big dollars.
Influencers & Sponsored Content
InfluencersSocial media also benefits from influencers. Influencers: These are like your iconic singers, dancers or whatever the hell they might be following on an account. These companies pay these influencers to promote their products because as followers, we love them & respect what they have.
One of the best illustrations is that if an influencer showcases their new fancy brand sneaker and his/her love for it almost all followers will want to wear those sneakers as well. A method to get many people to reach your services and buy through social media Advertisement Content.
The Power of Social Media
Well, in reality, socially connecting the two most sent people on Planet Earth is quite… something. Whether that be chatting with friends or finding out about new things, products even earning money.
Because businesses want to reach as many people online who spend millions of hours on social networks every day. That is why they are spending millions of dollars on ads and sponsored content. Social media is a lot of money already every year and that helps them to deliver their messages entertainingly.
Examples You Might Know
When was the last time you came across an ad when watching your favourite YouTube video or simply just scrolling on Instagram? All this is because those ads are helping the platform earn some of that capital.
The game or gadget being discussed by your favourite YouTuber might be paying them a little some. Even if you see posts about a new movie, typically that is how social media can help businesses generate revenue by creating buzz and having people talk about it.
The Big Picture
Like, how many dollars does social media make a year? The answer is a lot! Social media platforms make money on ads, in-app purchases, sponsored content and other paid features with billions of users across the globe. It is this money that helps to ensure these platforms remain operational, viable and free-to-use for everyone.
It is no longer just a frolic place where people meet and interact, it has become big business to whoever wishes to explore that side of social media platforms. So, you now have an insight into how these platforms work in the back and earn so much money as well as why they are necessary today!
