We all use social media for free. We post pictures and call our friends and family without worrying about the cost incurred because as we all know; they don’t cost a penny. So how do these companies grow so huge and even have multiple bases when we, the users don’t have to pay anything? We may have gone day after day not recognising how it affects the way we live, but social media gets their money from you whether you believe it or not. Even though you may directly not be making money, they are milking cash cows from your social media usage. So here’s how social media companies make money.

social media222 - How Social Media Companies Make Money

The first is by advertising. Advertising is a waterfall of money. Advertising is a method, advertisers use to get you to click on their products and buy it. If you’ve ever noticed, facebook has a lot of advertisements. Watch a 10 minute video on facebook and you’ll encounter a minimum of 2 advertisements and that’s if you’re lucky. The advertisements you skip have an after effect on you sometimes. If you see a McDonald’s advertisement on Facebook with ASMR effects, you’d have a tendency to go to a McDonalds after a while. You may not believe it but it’s the effect of the advertisements. It might have cost them 3 cents to put the advertisements and you gave them back 10 dollars. See how it works, that’s how social media earns.

 Next, social media companies sell their shares to regular everyday people. Shares on Facebook, Instagram and other big social media companies are always growing. Facebook shares are always around 1000-3000 dollars per share and if you want to buy them you’ve got to get 100 at a time. 30,000 dollars is about 120,000 Ringgit. They also sell a few million shares so count that and how much they earn, the money just keeps growing. Selling shares is a method many social media companies use to increase their valuation.

Next, social media also earns money through users’ advertisements. If you think only huge companies can afford advertisements, you’re wrong. Those small business products that you’ve seen, they’re not there coincidentally. They are there because the sellers paid Facebook to advertise to you. A 5 day advertisement is about 100 ringgit and if you want a longer and more widespread advertisement, you would pay more. Facebook does advertise it to people who are ready to spend money so it’s well worth it. But how do they do it? Social media companies are known for selling information to advertisers so that they can advertise to you. By doing this, they can focus on clientele who are more vulnerable to buying things than to a person who has never step foot into a fast food chain. The Cambridge Analytica scandal also showed that social media sells your information to third parties for a quick buck.  

Making money via social media is an inevitable cause. No matter what you do, you can’t remove them. However, as you’ve seen on YouTube Premium, they might soon or later charge you a premium for an advertisement free environment. Though it doesn’t guarantee whether they will stop selling information to third parties, it will confirm that you can watch videos without a single advertisement on your way. You can view more social media companies Malaysia to know how they earn their income.

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