How does Facebook make money? We know that Facebook is huge, and most of us believe that they have their own way of making money; but, do they? You will be surprised to hear that they make their money in a rather simple way. Facebook makes its money by using three methods: applications, gifts and of course – advertising.
Let us see how Facebook makes money from applications. Facebook uses applications that are made by many different companies. These companies rent their space on Facebook, and of course – they pay for it. Now, think about how many players there are in the world. Probably millions! A good reason for every company to pay!
You probably know that you can send gifts to your Facebook friends. If anyone has birthday or any other important occasion, you can use Facebook virtual gifts to make your friend’s day. This will only cost you 1 dollar! This is quite a low price, isn’t it? Now, imagine how many people out there send these gifts to their friends every day. Several hundreds of millions at least.
This is the major method of making money. Advertising has always been the most profitable field. Internet is the best place for advertising, and we don’t have to explain why it is so.
These advertisements are positioned at the right side, when you log in. Many companies use Facebook to promote themselves. All kinds of stuff are advertised here, literally. Many of us will start laughing when we see what is advertised there, but the fact is that there is nothing to laugh at. This is as serious as can be – this is a way of making some serious money.
Targeting any demographics is what makes Facebook advertising so convenient. If you are a veterinarian, and you live in Baltimore, you will target people who live near by. Or, if you sell insurance, you will target people who are over fifty-five. See how useful Facebook is to advertisers? Now, most of us don’t find these advertisements so useful. Some of us even have some kind of aversion to these advertisements. But does it really matter? The social network that was allegedly created for you and because of you, will not ask you for any opinion, will it? Of course, some users find this useful, so companies make millions of dollars thanks to Facebook advertising.
Most of the Facebook’s money is made by using ads. There are two types of ads on Facebook: engagement ads and self-service ads. The first ones are complex and they interact with a user, allowing surveys and other types of interaction. The second ones are rather simple and include info, picture and the link, of course.
Now, stop for a second. Think about how much time you spend on Facebook and what you do there every day. Keep in mind that Facebook knows you better than you think. Advertisements that show up on your screen will be just what you are interested in! Wonderful, yeah?