How Do Social Media Apps Make Money?

How Do Social Media Apps Make Money?
The Siliconreview
03 June, 2019

Are you confused about whether you should create your own social network app or not? Not sure if it will be worth the time or effort? If yes, then don’t come to a decision before you go through this article. Because, over the course of this piece, we’ll tell you how the big-name social networks –  Facebook, Twitter, YouTube – out there are making money, so you can also apply their methods. Let’s get started –

How Social Networks Actually Make Money

Social network sites are making money in various ways. Let’s break them down below –


Generally, if you aren’t paying for the social media app, then you are the payment. Yes, you’re the end consumer and advertisers are the source of money for social networks. By using these platforms, you’re selling them your time and attention, which advertisers are taking a cut off.

While you may think that’s an unethical way of raking in money, but it’s only fair for them to make money through ads as they’ve spent so much time building up their user base.

Online advertising is still a rising market. And because of the attention, these apps are holding, advertisers are willing to open their wallets further to get an ad there. The more the advertisers pay, the more prospects would see the ad.

Creative Products

Since monetizing a social media subtly ain’t a cakewalk, webmasters devise creative ways to make their revenue. One such creative way is Facebook Gifts. It lets you send virtual gifts to your friends that show up on your profile. They cost $1 and you can also personalize your message on them.

Premium Subscriptions

Would you pay money to use Twitter, Facebook, or Instagram? Probably not. Even if you decide yes, most people out there won’t. The only successful subscription social networks are the entertainment, media, and dating networks.  Free apps attract average users because there’s nothing to lose for them.

While most social networks are completely free, some offer premium versions to make some money in exchange for extra features. LinkedIn, for instance. They offer a premium subscription for job seekers. YouTube has also recently come up with their premium subscription, where they reduce hassle for the user.

But in all honesty, it’s hard to monetize social networks for the time being. Especially because there’s the risk of harming the user experience. Social networks that add applications and services into the community can make more revenue by charging a developer fee.

Venture Capital – If Everything Else Fails

Majority of the social networks start out with venture capital funds. Investors often take risks on companies if they see potential in them. So they write the check in hopes of getting a big return over the course of time.

Facebook is a prime example of this. They started out with venture capital. Same case for Twitter. They both had raised several million dollars as venture capital. The aim is to either monetize the network or sell it off to some large corporation to make a killing.

Last Words

Seeing from a consumer’s point of view, ads mainly were a way to enjoy the application at a far less cost. Without them, magazines and newspapers would have to double and triple their prices just to avoid losses. And the price increase would certainly reduce the number of pieces sold. Same applies for social networks. Doing so will make people quit social media. Because let’s face it – none of us would want to pay for it without having a taste of it first. It’s super crucial to make access easy, effortless, and free if social networks want to keep their growing up.