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How does social media generate revenue? (lemmy.world)

submitted 1 week ago by pointnull@lemmy.world to c/asklemmy@lemmy.ml

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What do people who own social media platforms gain from it and how? Where do they get the revenue from? I know that ads make up some part of it but is the revenue generated from ads enough?

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[–] dan@upvote.au 24 points 1 week ago* (last edited 1 week ago) (1 children)

Around 97% of Meta's revenue is from ads. 2.2% is from Reality Labs - things like Meta Quest headsets and Meta Ray Ban smart glasses. The remaining <0.7% is small things like fees from Facebook Marketplace (for orders that are shipped), a cut of credits for Facebook games (apparently that's still a thing?), etc.

Meta is a public company so all this data is public. See slide #4 in the most recent earnings presentation slides here: https://investor.atmeta.com/investor-events/event-details/2025/Q4-2024-Earnings-Call/default.aspx

[–] QuarterSwede@lemmy.world 4 points 1 week ago* (last edited 1 week ago) (1 children)

Thanks for posting this. That’s disgusting how much it’s gone up in a year.

[–] dan@upvote.au 1 points 6 days ago* (last edited 6 days ago)

For what it's worth, Q4 always has higher ad revenue because of Black Friday and Christmas.

I think the cost per ad went up too (that's also in the presentation). Google and Facebook both mostly use an auction system for ads, so the price is based on the market. Out of all the possible ads a user can see (active ads targeting their demographic), the one with the highest bid will be shown.