How Social Media and Other Websites Generates Revenue

Twitter, WhatsApp, Facebook and almost all social media apps are free; you wonder how they make money. I mean, could it be from the data you use? No, it’s not; then how?

When the internet was first introduced around here, we could browse through Wapdam, Waptrick and 2go; it’s okay if you once share the notion that these companies generate revenue by getting cut or shared from the data you purchase. Some of us even opened some .tk websites at the time just so we could get paid from the new cool (tech), but it is not so; in fact, it is far from it. MTN or any network provider do not pay any company, whether product-based or social media, simply because you browse their website. In this post, I’ll tell you all the possible ways that tech companies generate revenue, using the listed product at the top as an example.

1. Advertisement revenue:

The concept of money or revenue generation in any industry, including tech, is the number of audience and purchasing power. Social Media platforms have 200M or more daily active users. That presents a platform for advertisers to reach people and get sales on their products. Oftentimes, you see cards with “Sponsored” or “ads” labels; these are advertisers paying these social media companies to reach users on those platforms.

This same concept applies to building a website or blog. You will notice ads on products or tools you use often, and you must pay with your card if you want to remove those ads. Advertisers reach the platform owner; they pay them, and owners put advertisers’ ads and ask you to pay them to remove ads or probably patronize their client product from the ads you are seeing. MTN, Glo or AIRTEL do not send money to the website owner because you visit their website.
But Okay, Agba, Loud and clear, but I noticed  WhatsApp doesn’t have ads. How was it sustained for this long with no revenue generation nor monetizing over 1B users?
Ermm, well, there’s a saying in tech that “If you don’t pay for the product you’re the product” Meta is the parent company of “Facebook, Instagram, Messenger, and WhatsApp” all of which display ads except for WhatsApp. They can harvest your personal data from one app and serve you ads when you open the other. According to Statista, one in every 100 people in the world uses at least 1 Meta product.
So if by standard, they don’t show you ads on WhatsApp, the algorithm knows what you’re talking about, so when you open either Instagram Or Facebook, you see the ads of relevant things you’ve been talking about/wanting to buy or your abandoned Jumia cart. By the way, WhatsApp has stood the test of time and not having ads on it wasn’t out of the goodness of Zukerberg’s heart; the previous owner didn’t want it, and it’s been getting dragged for a while, sooner or later Ads will come to WhatsApp. What about other methods?

2. Selling products and services:

The concept of whether or not a platform uses ads depends on the type of product or the founder’s orientation. Some founders hate ads, and that’s why Elon will force down $8 per month on his newly acquired twitter and turn the platform to subscription-based, including ads. Other companies may sell products or services, mainly referred to as E-commerce(Jumia, for example), and for services, there’s SAAS (Software as a service).

In my future post, I’ll explain why MTN or any network providers/operators need the data they sell to give you access to sites that you browse.

Conclusion

In summary, Tech companies make money in the following ways
  • Ads or Audience Monetizations
  • User Personal Data (Information) Monetization
  • Product Sales ( E-commerce)
  • Software as a service (SAAS)
  • Not from using your data subscription definitely

2 Comments

  1. Thanks for the knowledge you do share to beginners like me
    I appreciate your good gesture.

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