How and Why Are Facebook Revenue Streams Profitable?

Facebook advertising is effective because of its huge audience. To succeed in advertising, one must be able to reach as many people as possible. Facebook users make it easy for an advertiser to do so and reach more potential customers while they are interacting. Facebook adverts are also strategically placed on the right-hand side of the user's home page, and they are more likely to provoke user to inquire more about the product. In this self-serving ad system, the company is focused on making eye-catching ads that would make a user look at before scrolling down. An example is when a user logs in to their account, and they are welcomed with captivating advertisement such as from Ford about one of their cars (Metz). In this way, they are able to make many users interact with the ads thus making it profitable.

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Another reason why Facebook adverts are profitable is that anyone can easily create their adverts easily. On Facebook, it is common to find adverts of local private hospitals and restaurants popping up on the right-hand side of the newsfeed. This indicates that anyone from any part of the world seeking to advertise their services can use Facebook ads to target their users within their area of operations. Self-serving ads are profitable because of the ability to reach many users within a short period. Ads of these nature are also very visual which catcher easily the attention of the users even when they are bored and just Facebooking. The captivating images in the form of ads as well as engaging videos are more likely to be profitable because of the high chances of visibility and being followed on by users (Johnson).

One of the biggest reasons why Facebook ads are attractive is because today the company can build a profile of their users using big data analytics. Today Facebook has accurate data about most of their users, and this has been a huge boost especially for advertiser looking to reach certain sectors of the population. This data which includes the location, age, and gender of the users has made it possible for them to woo more advertisers from different parts of the world. Facebook users thus would have different ads popping up on their newsfeed depending o their age, location and other specific factors used by Facebook. Although Facebook has been accused of not taking appropriate client's data the circumstances through which they operate makes it a priority to have specific details without providing them to third parties. This type of advertisement is profitable because advertiser all over the world is now pumping in money to Facebook to reach a specific audience (Gilbert).

The presence of data has also made Facebook ads more personalized based on the preferences of individuals. If an individual is into games, they are more lily to get more ads depicting popular games being directed towards their newsfeed. Targeted ads as they can match an individual like with certain adverts, they are more likely to prefer. By personalizing data, they make the ads more engaging thus resulting profit. The presence of huge investment on adverting by companies such as ford and McDonalds is an indication that these types of ads are profitable and that it pays to do it on Facebook.

In the case of mobile advertisement, it is common knowledge that today the majority of people use these gadgets regularly to communicate and gain access to information. This kind of advertising is profitable in that it integrates Facebook advertises their ads on the mobiles apps where individuals can interact with them while using these apps. Majority of mobile users have certain applications such as WhatsApp and Instagram which they use to interact regularly. Having acquired these applications fakebook placed itself in a better position to make more money through advertisement in these two popular applications. While adverts might not be much on these apps, one can be able to interact with them from time to time. These adverts make a lot of money for Facebook through in-app purchases as well as revenue split between the developers. Facebook for instance in 2016 generated 83% percent of its revenue through mobile applications advertisements.

Video advertisement is another revenue stream Facebook uses, and it is profitable because while the users enjoy communicating on the social platform, they are also targeted wit certain ads. Online interaction is not jeopardized because these ads are strategically placed to ensure they do not discourage the user from enjoying themselves. Through a single video individual from different can get respective advertisement directed to them just by watching. Facebook use has made it possible to reach many people worldwide of diverse backgrounds and easily make money advertising to many users.

Works Cited

Gilbert, Ben. "How Facebook Makes Money From Your Data, In Mark Zuckerberg's Words." Business Insider. N.p., 2018. Web. 11 Mar. 2019.

Johnson, Bobbie. "How Exactly Is Facebook Making Money?." the Guardian. N.p., 2009. Web. 11 Mar. 2019.

Metz, Cade. "How Facebook'S Ad System Works." Nytimes.com. N.p., 2017. Web. 11 Mar. 2019.