Facebook reveues reached USD 17.93 billion in 2015, up from USD 7.87 billion in 2013! And this year, Facebook with its 1.59 Billion Users has humongous target to achieve.
But everytime you login and engage yourself in chitchat and liking other’s posts, did you ever think how does this entity earn money?
Here's how they do
If you don’t pay, you aren’t the consumer
Do you pay for Facebook? Are you among the users who need to pay for gainig from Facebook? If you don’t pay to use Facebook, you aren’t the consumer. Rather you are the product.
Facebook earnings
Well its a known fact that 80% of Facebook’s revenues come from adevrtisements. Facebook generally has a lower clickthrough rate (CTR) for advertisements than most major websites. According to BusinessWeek.com, banner advertisements on Facebook have generally received one-fifth the number of clicks compared to those on the Web as a whole, although specific comparisons can reveal a much larger disparity. For example, while Google users click on the first advertisement for search results an average of 8% of the time (80,000 clicks for every one million searches), Facebook's users click on advertisements an average of 0.04% of the time (400 clicks for every one million pages).
It’s not as easy as it seems. There’s a reason for everything.
You are basically the product Yes you read it absolutely right. What Facebook does is keep a strict scrutiny on everyone’s profile, no matter whether they are fake or anybody. They just keep surveliencing on you. Everything you do, right from putting up a photo, checking in, liking someone’s post or even if you read news there, you are been recorded. They keep the data and analyse you. By the time you spend even an hour, Facebook knows your preference of food, sex, travel, fashion and even risks. Yes, they know how much advneturous you are.
Then the action happens
Now comes the most crucial part of the business. Facebook has all data about you. Now they would sell this data to their clients with information about you. So you checked in at a Zara store for three time in a month and Facebook knows you love fashion. Your search for lingerie even without logging out of Facebook would have your Facebook ads containing links from a lingerie brand. If you have searched for a hair dryer on Amazon, you keep seeing ads of the same kind of product for few days on Facebook. Right? If you are too engrossed into start ups these days, you would see ads of Start up Summits happening all aorund you. That’s how they funnel informations for you as they do it for their clients. Facebook knows how good you are at taking risks. For you might have ticked Going option on a Facebook group of ‚Gay Cruise‘ for Christmas. Now facebook will inform its client that this user is more potential to buy than others.
Who are these clients of Facebook?
The biggest spenders on Facebook’s platform includes Ford, HSBC, Budweiser, Mcdonalds, Visa, Nike, JP Morgan Chase, Starbucks, Disney, Unilever, Nestle, Samsung, Zynga.
