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How Do Social Media Apps like Facebook (Meta), YouTube & Other Make Money

Advertisement is a great source of revenue for their earnings

There are about 4.7 Billion People around the world that use social media. I think that’s all to define social media. You would have understood how media generally engages people to earn. People around the world use social media eagerly. This is a great source to keep people on track with what social media wants. The average time a person spends on social media is 2 hours and 30 minutes. But most people are curious to ask the question that how actually social media earns money. That’s a great question to answer. We will let you know how social media earn money.

Social media apps provide free entertainment and services to people around the world. As we know better that with the passage of time people want to shed their boredom in any way, so here the media helps them to do so. There are thousands of social apps on which people pass their time well. The apps keep them happy by showing the exact content that they want to see. This is how media tie the people to its apps by displaying entertainment and likable content to users.

This was the first thing we needed to understand how media engages people. Let’s see some statistics of major social media apps that will definitely give us a closer look at understanding the overall cycle and system. Facebook (Meta) is said to have more than 2.9 billion monthly active users, Twitter has almost 450 million and YouTube has 2.1 billion, Instagram has 1.4 billion, Tiktok has 30 million, and a lot of other social applications so on. The point here to understand is that due to such huge traffic social media has tremendous power to advertise any type of business. In this way, social media uses its traffic power to earn money from businessmen. Let’s see more in detail.

Money Making through Advertisement:

Have you ever thought that with how people are familiar with international brands? Let’s suppose how you got to know about KFC, McDonald’s, Apple, Starbucks, and many other multinational brands. You may have heard about them from any advertisement source or social media. Gradually you saw advertisements again and again & finally became familiar with these brands. That’s how advertisement works for a business.

Social applications have huge traffic and the potential to advertise any type of campaign. Businessmen use these social media platforms to tout their businesses. Wherever they want to advertise, they can. Social media keep the worldwide traffic so this is the advantage of social media that it can show the advertisement as per the location requirement of the paid advertiser.

Meta is a big advertising source

Meta is a big advertiser. Most people use this app because it is a social app that brings great entertainment and service to them. Meta (Facebook) has a huge revenue per user, as per the 2022 report, Meta has $32.03 ARPU (average revenue per user) and it has a $1 trillion market capitalization. Meta is competing with other competitors in the market like Google, Apple, YouTube, Amazon, etc, but due to its great services, it is still a popular app that most social media users use.

We can bifurcate the Meta into two sections: one is the Family section which is used 97% and the other is the reality lab which contributes 3% so far. The family section is the main section of Meta, the list of family section apps is given below:

  • Facebook
  • Instagram
  • Messenger
  • WhatsApp

These are the main social media apps that are used for advertisement and earning by Meta. The second section includes the products of the company like virtual-reality & augmented products and services.

The family section of the company earned about $32 Billion in revenue in the 4th quarter of 2021 which is 97% of the company’s total revenue. On the other hand, the second section reported $877 million in revenue in the 4th quarter of 2021 which comprises about 3% of total revenue.

Types of advertisements:

There are many methods used by social media apps to advertise a particular campaign or advertisement. The advertisements are:

  • Self-serve advertisement
  • Targeted advertisement
  • Messenger ads

Self-Serve Advertisement

The self-serve advertisement is the type of advertisement in which any source or medium allows the person or advertiser to set the criteria of the campaign and purchase digital inventory. This type of ad needs no human assistance and it is a cheaper source of advertisement.

Targeted Advertisement

In the targeted advertisement, the social media platform targets specific people, their interests, and particular location or area in order to get better and defined results. This method of advertisement is very effective because it reaches targeted people and locations.

Messenger Ads

This is a new way of advertising that is newly used by many social media apps for boosting their advertisements in a new way. It allows users to see your ads and start a conversation with our business or service with a click on the button. Destination and sponsored ads are the famous, effective, and common methods used by Meta (Facebook).

YouTube Video Advertisement:

A huge portion of YouTube’s revenue is due to its video advertisement. You must have encountered the commercials and ads while watching a video on YouTube, usually, ads run before the video starts as well. According to your search on google, it generates results related to your search by using its google algorithm and gives relevant results to you. Commonly it shows YouTube videos related to your search and relevant suggested pages from AdWords advertisers. The companies or Businesses that want to advertise their business on YouTube pay to YouTube for showing their ads during the video. This is how YouTube is a direct source of advertisement and generates revenue.

Is social media more effective than print media for an advertisement:

The simple answer is absolute Yes. As we have told you earlier in the starting paragraph of the article that 4.7 Billion people use social media. Nowadays print media is not as prominent as electronic media, especially social media. Communication is 24/7, hence the advertisement social media is the most powerful tool to boost the business and services of the people. Social media advertisement means huge customers and huge profits.

You must have understood that social media engage people, and provide them entertainment, and hence it uses the masses to earn from businesses and multinational companies. Companies spend money on advertisements to make their product or business familiar to people and pay a lot to social apps. This is a great cycle of money in which social media plays a very important role to make the world services available on the doorstep.

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