Social media is a big part of life and not only is it one of the fastest growing technological apps in the world with nearly 3.7 billion active users, but on average, users have 7.6 social media accounts - so that’s a lot of people active online using mobile devices.
Social media really started to kick off in the mid-2000’s. Facebook - one of the oldest and most established social media sites in the world - was founded in 2004 by Mark Zuckerberg, along with his fellow Harvard College students and roommates. Originally, its founders limited the social media site to Harvard, Columbia, Stanford and Yale students, then it expanded out to other Ivy league schools, and eventually in 2006 anyone over the age of 13 years old could register themselves as a user on Facebook.
Since then, other social networks began being founded, such as YouTube, LinkedIn, Instagram and Twitter.
Social media companies make their profit from venture capitalists and investors - these investors make a bet that their investment will become popular and eventually have, hopefully, get a return in funds.
But, social media platforms also make money off their users, too. If a user isn’t paying for a product, the product is the user. Investopedia defines social media making money off its users as the following:
“The real transaction here isn’t you receiving enjoyment in the form of a free temporary distraction created by a media company at great expense, but rather, that media company renting your eyeballs to its advertisers.”
So, how much money are some of the top social networking sites making per user? Well, PostBeyond has analysed data and visualized it in a bubble graph that you can view below. Here are the top social networking sites, as well as data on how much they make in revenue per user.
So how much money are the likes of these social networking sites making in total? Facebook’s revenue increases year on year - in 2016 their revenue was £27.6 billion, where as, fast forward to the end of 2018 and their revenue had doubled to $55.8 billion.
Social networking sites make lots of profit and reap in high revenue year on year. But, social media is also very powerful. Back in 2018 Snapchat stock lost $1.3 billion after Kylie Jenner Tweeted that she no longer used the app. With Kylie Kenner wielding extraordinary influence on a variety of social platforms, many of her followers and fans then decided to either delete or unsubscribe to the app. Therefore, there are many risks to owning and investing in a social networking app or site because users’ opinions on the network can change almost instantaneously - networks have to be one step ahead of their users; always thinking about the next technology trend, how they can improve their communications on the app and ensuring their users are happy with everything.
Another example includes Facebook. In 2018 Facebook lost a million daily and monthly active users in just three months. The social network was the subject of a cyber attack and was at the very centre of a data privacy debate in the wake of the Cambridge Analytica scandal that occurred in March of 2018. Data reports showed the number of Europeans logging onto the site everyday dropped from 279 to 278 million.
It’s important for social networks to focus on making their consumers and users happy. Social networking sites are different to a usual business that sells its consumers a product - social networks are mostly free of charge for users, but they make their money off their investors and advertisements. However, if the users aren’t happy and they decide to unsubscribe or delete their profiles, the network - which is the product - is no longer deemed needed. Therefore, keeping social network users happy is of utmost importance.
The infographic created by PostBeyond reveals just how much social networks make and how popular they are with their users.
So who will be leading the way in the social networking battle next year? Maybe Instagram or YouTube will takeover the reigns from Facebook?
Read next: Which Companies Turned A Profit the Quickest - And Which Have Yet To?
Social media really started to kick off in the mid-2000’s. Facebook - one of the oldest and most established social media sites in the world - was founded in 2004 by Mark Zuckerberg, along with his fellow Harvard College students and roommates. Originally, its founders limited the social media site to Harvard, Columbia, Stanford and Yale students, then it expanded out to other Ivy league schools, and eventually in 2006 anyone over the age of 13 years old could register themselves as a user on Facebook.
Since then, other social networks began being founded, such as YouTube, LinkedIn, Instagram and Twitter.
Social media companies make their profit from venture capitalists and investors - these investors make a bet that their investment will become popular and eventually have, hopefully, get a return in funds.
But, social media platforms also make money off their users, too. If a user isn’t paying for a product, the product is the user. Investopedia defines social media making money off its users as the following:
“The real transaction here isn’t you receiving enjoyment in the form of a free temporary distraction created by a media company at great expense, but rather, that media company renting your eyeballs to its advertisers.”
So, how much money are some of the top social networking sites making per user? Well, PostBeyond has analysed data and visualized it in a bubble graph that you can view below. Here are the top social networking sites, as well as data on how much they make in revenue per user.
- LinkedIn- $17.10
- Twitter - $9.22
- Snapchat - $4.42
- Pinterest - $3.77
- Reddit - $0.30
- LinkedIn - 310,000,000
- Twitter - 330,000,000
- Snapchat -294,000,000
- Pinterest - 322,000,000
- Reddit - 330,000,000
So how much money are the likes of these social networking sites making in total? Facebook’s revenue increases year on year - in 2016 their revenue was £27.6 billion, where as, fast forward to the end of 2018 and their revenue had doubled to $55.8 billion.
Social networking sites make lots of profit and reap in high revenue year on year. But, social media is also very powerful. Back in 2018 Snapchat stock lost $1.3 billion after Kylie Jenner Tweeted that she no longer used the app. With Kylie Kenner wielding extraordinary influence on a variety of social platforms, many of her followers and fans then decided to either delete or unsubscribe to the app. Therefore, there are many risks to owning and investing in a social networking app or site because users’ opinions on the network can change almost instantaneously - networks have to be one step ahead of their users; always thinking about the next technology trend, how they can improve their communications on the app and ensuring their users are happy with everything.
Another example includes Facebook. In 2018 Facebook lost a million daily and monthly active users in just three months. The social network was the subject of a cyber attack and was at the very centre of a data privacy debate in the wake of the Cambridge Analytica scandal that occurred in March of 2018. Data reports showed the number of Europeans logging onto the site everyday dropped from 279 to 278 million.
It’s important for social networks to focus on making their consumers and users happy. Social networking sites are different to a usual business that sells its consumers a product - social networks are mostly free of charge for users, but they make their money off their investors and advertisements. However, if the users aren’t happy and they decide to unsubscribe or delete their profiles, the network - which is the product - is no longer deemed needed. Therefore, keeping social network users happy is of utmost importance.
The infographic created by PostBeyond reveals just how much social networks make and how popular they are with their users.
So who will be leading the way in the social networking battle next year? Maybe Instagram or YouTube will takeover the reigns from Facebook?
Read next: Which Companies Turned A Profit the Quickest - And Which Have Yet To?