Is Social Media Free! Or are We Paying with More than Just Money?
Imagine going through a whole day without Facebook, Snapchat, or Instagram?
Sounds like a punishment, right? Who doesn’t use social media? It is fun, informative, and we can call or text anyone without any additional charges, search for information, interact with new people.
According to the Global Digital Report 2019, Out of 4.38 billion internet users, 3.484 billion people use social media worldwide, with a 9.1% increase annually.
With its many advantages, the questions we must ask ourselves are,
WHAT does the company get if everything is free?
HOW do they make money?
WHY they provide us with such great services if they aren’t even paid!
What is Monetization?
Before going much further, we must understand the term monetizing. It means producing revenue through a business or converting something into money. That is how the Social media apps work, converting information either in the form of a game, application, or your personal information into money. Let’s look at a few ways such networks earn.
1. Advertisements
The creator of pop-up ads, Ethan Zuckerman, apologized for inventing the most hated (and rightfully so) form of advertisement. Every social media app runs ads, and that is the top revenue-producing factor.
Daraz, Alibaba, and other online shopping sites use social media to advertise their product and reach potential customers. They pay millions of dollars for their ads to appear on social media.
2. Venture Capitalist
How do you think companies like Facebook and Twitter started?
In a word, Venture capitalists!
CEO of Facebook, Mark Zuckerberg, started his company as a Flordia LLC, and Mark Zuckerburg and Eduardo Saverin paid the operational costs. It received the first Angel investment from venture capitalist Peter Thiel for 10.2%of the company. Not only Facebook, but Twitter also started with a venture capitalist.
4. Monetizing Data
We use social media daily and share our life with friends, family, and even strangers! It includes our wants, needs, interests, likes, and dislikes. All that data is valuable to a social media site (even if it’s not valuable to you).
Scroll your Facebook NewsFeed for five minutes, and notice the number of ads and sponsored posts you see! If you think that you are just a random person looking at a random ad, then you’re mistaken. When a company registers itself on Facebook, its automated ads are tailored to its business needs.
5. Premium Versions
Social media platforms like Instagram, Twitter, or Facebook don’t offer premium versions, but some apps like LinkedIn and Tumblr offer it to their users. Premium versions are paid. The companies provide users with many features otherwise unavailable.
Companies offer the premium version to the free user for a trial period. It helps them attract customers as people get used to the extra features and are willing to pay for the premium version.
How Does that Help You?
Social media is a vast platform often associated with fun and enjoyment but equally important for a business. Before using social media, we must also know how it works and its many advantages and disadvantages.
