How Does Facebook Make Money?

How Does Facebook Make Money?

Facebook basically earns money by selling spaces for advertisement on different media places. This may include websites and applications that enable users to connect with other people.

The company owns the websites and applications including the social website Facebook, Photo and Video sharing app Instagram and the chat applications Messenger and WhatsApp. Facebook also provides a system that allow users to connect through its Oculus virtual reality (VR) products.

Facebook has competition with other companies that sell advertising spaces on the market. It also competes with the companies that allow users to share content. The most famous of them are Apple, YouTube, Tencent Music Entertainment Group and Amazon.

The important news – Facebook

  • Facebook is selling ads on the social media websites and mobile applications.
  • Selling of Ad Space are the primary source of income for Facebook.
  • Facebook is doing investment on the upcoming technology like, Artificial Intelligence (AI) and also bit coin and augmented reality.
  • Facebook’s cryptocurrency is facing heavy retaliation from central banks and other authorities from all over the world.

How does Facebook make money?

As we know that Facebook has millions of users and the ways from which Facebook earns money are also different. Facebook not actually earns money on the content or on the base of user. Facebook earns a good revenue on the base of online advertising. By these advertisements company earns its 85% revenue from the ads that is about $39.9 billions.

Types of Ads from which Facebook earns

The are different types of adds that are categorized by Facebook. It’s types are

  • Self Serve Ads : these types of ads are commonly used on Facebook. It allows anyone to put an Ad on Facebook anytime.These Ads appear on the right side also known as side bar.
  • Targeted Ads : Facebook Allows a user to use the option of targeted Ads. In this category users can target the audience according to their own choice. This may be according to the area and community you want to reach. Facebook allows companies to give space about to reach the preferences you want .
  • Facebook Messenger Ads : The application owned by Facebook known as Messenger also allows the advertisers to advertise their products and services. It also has a very huge audience of more than 2 billion users. Facebook is also working to expand the messaging marketing and also purchased WhatsApp to promote this advertising method

More ways to Earn

There are some other ways through which Facebook earn money that are as follows

Video Ads

Facebook live has made easy to the users to connect them via video. This feature enables the user to check in with others user thousand miles away. Users are also using this feature heavily. Facebook sees that it is the effective manner to connect advertisers and user to each other. Broadcasting live is trending. Facebook started videos ads on its signature video platform commonplace.

Data Generation

Facebook earns more than 80% of its revenue from ads but advertisements are not the only tool to generate money for Facebook. Data generation is also a tool of earning for Facebook. Although a recent Cambridge Analytica scandal may have effected its generation of revenue.

While it is estimated that Facebook earns $27 from the user of European countries and $84 from each of its north american user.From the Us Canadian market $81 is generated. and 3% of the revenue is earned from user based data generation and business payments