How Does Social Media Make Money?

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The Story Behind Social Media

Years ago social media wasn’t a booming profitable business. Yes it made money but it was typically a smaller company or more inclusive. The idea behind social media is that many users are able to share their experiences over the internet. This was great for families or friends who lived away from each other, because it allowed them to keep current with events going on. Social media also allows you to share stories or videos that you find interesting online. In general, the whole idea behind social media was and is a great one. But how does social media make money?

The Profitability in Sharing

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There are many ways to make money through social media, but sharing is a key aspect of it. When you share something online with others, that allows the content creators to reach more people. This is important because if it’s a video with ads then those ads reach more people. This is a great way to support content creators because it costs you nothing while they still make a profit off of it. So how does social media make money through this? It’s quite simple actually. Companies pay you for placing ads on your own content, whether it’s through people clicking them or making purchases. More sharing equals more profit.

How Does Social Media Make Money Other Ways?

There are a few other ways to make money as well. Companies like Facebook will use your information to monetize directly towards you. When you browse online they know what you are clicking on or looking through, making it easier to suggest products. The ads displayed on the side of your screen will often be related to things that you clicked online. Ever notice how those dresses, shirts or shoes appear in the ads beside your screen? Facebook isn’t the only company that gathers your browsing history. Ads are a major part of selling and profitability but there are also some other ways they make money.

What you Share Online Makes Them Money

Let’s put ads aside for a moment. If there are no ads then how does social media make money? This is the reason why many companies are facing concerns over privacy. It’s a bit sneaky but companies who run websites like Facebook, Twitter, Instagram or any social media, sell your information in some way. Your name, location and habits are worth a lot of money to companies. Even surveys or studies find value in this information as well. It’s not always about the ads they can give you but the habits that you have which offers the profit.

How Your Browsing Habits Matter

How does social media make money with your browsing habits, if you are careful? No matter what you do, if you are online you have given away some information. Your location is given away the moment you visited their website. But it’s not always that bad because your native language or relevant information relies on this. However, this already lets them know how to better monetize their content to you. The possibilities are endless but here’s a small list below, of the things they can get information from.

Your location.
Your name. It can give away a lot of other details.
Browsing history (not the same kind you delete from your browser).
Posts you like or put online.
Friends or family you add to your social media.

Your Connections and Their Value

How does social media make money from your connections? By tracking your information they can also track the information of your connections. Location can be narrowed down and their habits connected to your own. This is, in a away a technique of social engineering. They want to know more about you and your connections, therefore they gather information from everyone. There is profit to be made from understanding each individual.

Some Final Tips

In the end it’s inevitable to avoid all the ways they can profit from you. Even if you are careful, they can gain information about you through your friends or family. Sounds illegal right? But it’s perfectly legal in most cases because all those things that you click “accept” on, is all the permission they need. If you don’t have a profile with that company anymore, you can specifically request they remove all their information about you. You can also make sure you go through the settings and remove permissions that were given or naturally already turned on. But in the end, how does social media make money if no one is buying? And sadly, that is where they make their profits, from your information. I hope this helps to answer “how does social media make money?”, and please drop a comment or suggestion below!
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