Most social media platforms, such as Instagram, Twitter, or Snapchat, are entirely free for their users, and Facebook is also one of these free social media services. Remember, everything in business life needs to carry profit. However, when you sign up on Facebook, the site does not ask you to make a payment. Because of this, you may be wondering how Facebook makes money.
Before starting, you need to know Facebook has a huge database and has the most popular messaging app, Whatsapp. Both social media services are free. So, how is that possible?
Facebook makes money in more than one way, but the most significant part of its revenue comes from ads, as you guess. Traditional advertisement methods have been changed entirely by Facebook. The company works on the target audience. Suppose, when you want to promote your brand or business on Facebook, you need to make payment to Facebook. Remember, social media services has a huge database as it has been recording everything you have uploaded or written. Because of this, Facebook can reach any information about you, such as your interests, favorite places, and brands. Please remember; who owns Whatsapp? Bingo! Facebook also combines your Whatsapp information to access more information about you, according to some sources. So, Facebook brings products and services you can purchase to your Facebook timeline; when brands’ revenue increases, Facebook’s revenue will increase day by day.
The main source of the Facebook company revenue (almost %98) is advertisements. Most of the digital advertisements on the platform are provided by pay-per-click. At this point, one-click may not cost that much, but billions of clicks come together. Thus, we can say that billions of clicks mean billions of dollars.
Besides, each advertiser needs to decide what kind of people they want to reach and offer their ads. For instance, you are an advertiser and promote a luxury clothing brand like Chanel. Your target customers’ should be;
Age: Approximately between 20 and 40
Interests: Luxury clothes, bags, and shoes
- Facebook Messenger: Facebook Messenger offers a great way for Facebook users to engage with each other. Besides, advertisers can promote their products and services on Messenger as its audience is huge, with almost two billion users.
- Video Ads: Facebook Live is a digital tool that allows Facebook users to broadcast a live feed. Besides, Facebook Watch is one of the most commonly used Facebook parts, with more than 150 million people per day. Thus, advertisers can reach more people via both Facebook Lives and Facebook Watch services.
- Facebook Mobile: Mobile advertising creates 83% of Facebook ad revenues.
How Much Money Does Facebook Make Per Day?
On average, Facebook makes money between 8 and 10 dollars from one user in one year. Facebook earned 17.7 billion dollars in the first quarter of 2021, and the average revenue per user is 6.95 dollars. We can say they make approximately 20 million dollars per day.
Facebook Making Money In Short
Facebook makes money in different ways; it sells advertisements on social media platforms and apps. Remember, the main source of the Facebook company revenue is advertisements. Facebook also uses Whatsapp to gain more and more information about its users, such as their interests, preferences, income, gender, age, geographical location, occupation, and education level. So, Facebook will be able to offer highly-personalized products and services ads for each user. When you download Facebook and Whatsapp, they will ask for ‘Agree and Continue.’ Therefore, when you click to confirm the icon, you will give Facebook and Whatsapp rights to access your information. Remember, Facebook doesn’t sell users’ data directly. On the other side, it uses those data to make money via advertisers. There is only one way to stop sharing your data; you need to give up using these social media services.
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