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?
Ads and selling your personal data. In twitter’s case elon musk also uses it to influence politics and amplify his own opinion.
Some also have subscriptions.
This is 100% correct but just wanted to say when I see an admin account with the little red A. I always think it’s the Scarlett Letter and giggle.
If you’re really curious about this you can look into Meta’s shareholder statements. They’re a publicly traded company so these documents are available for everyone to see. But, yeah, long story short, it’s ads. Things like sponsored content (paying to push posts to people) is essentially just the platform itself doing it instead of using a third party.
For companies that aren’t publicly traded it’s trickier. A lot of privately traded companies are being propped up by VC funding. Many times they’ll operate at a loss to gain more users then worry about how to become profitable later. Bluesky is definitely such an example right now. They don’t run ads and don’t get money from users.
Attention. Ads are shown to the viewer, engagement with content tracks your likes and dislikes to sell to data brokers, inpost sponsors let the creator make money directly same with affiliate links, engaging with creators on multiple plstforms.
Ads are a bigger business than you might expect. Get enough eyeballs in one place and brands will be tripping over themselves to give you money just to mention their name. Take the superbowl for example. It’s usually the most viewed event every year in the US, so naturally there is a tradition of advertisers pulling out all the stops and making high-budget bombastic commercials for that specific occasion. You can imagine how attractive it is for brands to want to put their ads on big social media sites, where psychological tricks are used to capture as much attention as possible at all times, instead of just once per year.
Then there’s the user data angle. The big sites all have millions of users who constantly give away personal information without even being prompted, and that makes it really easy for the companies who run them to analyze what makes each user tick and serve ads to the people who are most likely to click on them. This elevates the rate brands are willing to pay even further.
Those two things, along with a suite of anti-competitive practices, are enough to get sites to the point of being mostly profitable. Venture capital and hype-based market speculation get them the rest of the way.
