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How does Facebook Make Money?

Despite having two billion users on its platform, Facebook doesn’t make any money on the content or directly via its user base. Instead, it makes billions through digital advertising, as Facebook has something that companies actually want-access to billions of people across the globe that might purchase their services or products. In fact, so many companies advertise on Facebook that in 2017, Facebook make money and has earned $39.9 billion from advertising revenue. All in all, the company earns almost 85% of its money from advertising.

Forms of advertising that Facebook use to make its money

Self-Serve Advertising

This type of advertising is extensively used on Facebook – self-serve advertising allows you to create and put up an advertisement on Facebook. Self-serve advertisements appear on the right-side on the Facebook page, for individuals, user profiles, groups, events, and third-party pages. The Ad Manager of the Facebook page helps to advertise create their own advertisements and provide granular target tools to make sure that the advertisement reaches the intended audience.



Targeted Advertisement

Facebook also holds a huge amount of personal data on its user base, that include age, gender, career choices, hobbies, shopping preferences, political preferences – even their favorite baseball team. It allows Facebook to see advertising space to companies who want to sharpen in on an individual demographic, such as video game players or Range Rover owners. Or, more generically, advertisers can target advertisements to the larger groups of people that is based on political preferences, age, and even religion. Ads can use individual tools like Dynamic Ads of Facebook to market the whole products to the users at various income levels, to up their chances of making a sale. Targeted ads are an important revenue generator for Facebook and it is all because of the data the company gathers on its user base.

Facebook Messenger Ads

Facebook’s ubiquitous Messenger tool that allows Facebook users to engage privately on a one-to-one basis is increasingly being leveraged by advertisers to get the word out on their services and products. The Messenger audience is huge, with two billion user engagements recorded in the fourth quarter of 2017. Facebook is looking to expand its use of messaging advertisements via its 2014 purchase of Whatsapp, the extensively used mobile messaging app

Video Ads

Traditionally, Facebook Live has thrived as a digital tool that will enable Facebook users to connect through video, allowing the grandparents to check in with their grandkids thousands of miles away or old college friends to re-connect online to share stories of their days back on the campus. More or More, Facebook views video as an effective means of connecting advertisers with Facebook views videos as an effective means of connecting advertisers with Facebook users through Facebook Live. Broadcast through Facebook Live are on the upswing, and Facebook is capitalizing by making video advertisements on its signature video platform commonplace.

Facebook Mobile

In 2016, the core mobile app of Facebook is generated 83% of Facebook and Revenues, making mobile its biggest money-making digital tools. As Facebook continues to explore new advertising platforms, expect Facebook mobile to carry the revenue burden for the company, as mobile advertising that grows at a double-digit growth rate on an annual basis.

Data Generation

Facebook is approximate to earn 85% of its entire revenues from advertising, but advertisements are not the only source of income for the social media company. Data generation is just a cash cow for Facebook, however, the current Cambridge Analytic Scandal, a data breach potentially exposing 87 million users to the hackers and data thieves might have curbed Facebook’s data generation revenue.

Although specific numbers are hard to come, it is calculated that Facebook earns $84 from each of its North American users, and $27 from each of its European users. Of the U.S. and Canadian markets, about $81 of that revenue comes from advertising (up from 12% in 2012), leaving approximately #% in revenue earned from user-based data generation and direct business payments. Call on Facebook Number UK to get connected with the technicians for instant and reliable assistance. The experts are available all the time to help you in any manner they can.

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