All of you must have heard of this ever trending social networking platform for sure. It is actually a household name. This great site helps you remain in touch with your friends and family and not just that, but it is a great way to make money too.
Some stats about this brilliant platform is that the number of users who register monthly are over 2 billion, and the numbers are expanding rapidly.
If you check the rankings of websites, then you would be able to see that Facebook ranks third amongst them. The only websites which are better in terms of ranking over this are Google and YouTube. So this basically means that this certain media channel has a deep impact on people throughout the world. And now that Facebook has become really popular, it has incorporated several tools which allows people to earn. This great website has reach globally, and it allows people to post pictures, videos as well as audio content. But how does Facebook earn from all this is a question which is unanswered and we will dwell upon this now.
How Does Facebook Make Money?
In today’s day and time, if you are thinking how Facebook makes money, then we would help you take a look at what this social media giant does. Facebook has now emerged as one of the single largest common platform for the same. Not only can you promote your home based ventures, but also any product and services. Even the biggest of banks and MNCs have a presence here.
As of now, people have started designing things at home, putting up great pictures and promoting them through Facebook. And because of this, the single most important revenue channel for Facebook is advertising. This company has been ad supported all the way and it would continue to do so in the future too.
The Self-serving advertising platform is the largest revenue generating prospect for them. If you see the side bar of most pages of the site, you would be able to see these ads. You can see them on Facebook Pages, event groups etc. The best part of this advertising platform is its amazing targeting features. You can customize it according to different variables like gender, age or even relationship status. Also, Facebook Ads API has been released which helps provide large ad buyers to build robust ad managers on top of the Facebook advertising platform.
In case you have a home owned business or you are a doctor, lawyer etc, then you are also responsible for generating some great revenue for Facebook.
This is part of advertising, but is usually meant for large brand advertisers. These engagement ads, if you look closely are placed on the sites homepage only, and look really engaging. So if the users logs in into this, then they are also able to interact with the advertisements.
2) Gift Shop
Another great way through which Facebook makes revenue is through its gift shops. For all those people who are not really familiar with the concept of gift shop, this is a great product which has been recently launched by this social media giant. This allows you to send virtual gifts to each other which is easy, cheap and convenient for people. This business is said to be extremely lucrative and the revenue that Facebook generated through it last year was even more than a 100 million dollar.
To increase the variety of the products that are sold through the shop, Facebook has now opened up the gift shop to third party developers too. Eventually, the gift shops became open to non profits as well as other developers too. And due to this, this years expected revenue through Facebook is over 150 million dollars.
3) Facebook Credits program
Another way through which Facebook generates its revenue is through its Credits Program. This is an extension of the Gift Shop Program only. This way Facebook can open up credits to third party developers, and the point is that applications such as FarmVille and other large social games integrate Facebook’s Credits product directly into their applications.
So basically, Facebook will in turn take a large percentage of all virtual goods sold through applications. As of today, this giant has come up with various ways to integrate Credits. Apart from that, Facebook has also been testing in-application credits as well as user to user credits.
4) Direct Advertising
A small business can post advertisements directly on a regular Facebook page so that customers can be attracted to what your business is. You can post about anything from classified to business, products or services. It’s a great way to post your advertisements. And in case you are a jobseeker, you would know that to find good employment opportunities, Facebook is a great way to connect to likeminded people, and this way Facebook gets commission too.
Here’s a look at some of the biggest spenders on Facebook:
- Ford: They believe that if people like you on Facebook, then they are more likely to advocate the brand.
- HSBC has a large Facebook following specially in Asia and Europe.
- Even McDonalds has over 30 million likes on Facebook.
- Apart from that, the brands who saw the rise in users through Facebook and thought it was viable to invest in this were Starbucks, Nestle, Samsung, Dell, Unilever.
So basically, when these brands advertise with Facebook, they charge for likes and shares. The cost of the ads on Facebook varies but usually is in the range of 5 cents to 5 dollars ber click, and the cost goes up as per the engagement. So they get money for Sidebar ads, sponsored stories or even promoted posts.
There are a number of ways through which Facebook makes money, but advertising is the major way for them to earn revenue. With self-serve ads becoming a booming business for Facebook and with the growth of Engagement Ads, Facebook could actually be able to generate a huge revenue, say about a billion dollar this year.
Facebook has been growing extensively through Ads, and if it goes on the right track, then it would easily double last year’s revenue. While many users still wrongly think that Facebook will charge users because they are really not able to pay for the site, the harsh reality is that advertising is actually proving to be a very big business for the huge social media giant named Facebook.
We hope all your doubts about how does Facebook Make money are solved. Let us know if you have any more questions related to social media. We will be happy to help.