How does social media generate revenue?
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Around 97% of Meta's revenue is from ads. The rest of the revenue is mostly from Meta Quest headsets these days, but also small things like fees from Facebook Marketplace (for orders that are shipped), etc.
Meta is a public company so all this data is public. See slide #4 in the earnings presentation here: https://investor.atmeta.com/investor-events/event-details/2025/Q4-2024-Earnings-Call/default.aspx
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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.
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Take the superbowl for example. It's usually the most viewed event every year in the US
Interesting that you mention the superbowl, since one of the techniques that sales reps at large digital ad networks (like Google and Facebook) use to sell ads to large advertisers is comparing it to the superbowl.
This year's superbowl had a viewership of around 127 million people. In comparison, 194 million Americans use Facebook at least once per day and 267 million use Google, so your ads on those platforms will have a wider potential audience than the superbowl, while being much more cost effective since you can run the ad just to a more specific audience rather than having to run the ad to every single person watching TV at that time.
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Yea, I mostly meant selling your data to advertisers, but in the case of big companies the ad platform is ofcourse internal.
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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.
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Thanks for posting this. That’s disgusting how much it’s gone up in a year.
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The amount of money Meta makes from ads is absurd! You would not believe how much companies are paying each day.
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In 2024, Meta (formerly Facebook Inc) generated over 160 billion U.S. dollars in ad revenues.
— Statista
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They sell your eyes and your mind.
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First the learn about who you are so they can provide accurate demographics to target with ads. Advertiser's pay heaps to be able to hyper specifically target ads.
Then they scape messages and information from their uses to build datasets which they sell.
Then there is premium subscriptions for business accounts.
In Asia they have in app shopping where the social media site gets a cut of every purchase.
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Q4 always has higher ad revenue because of Black Friday and Christmas.
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Advertisers don't see any of the data though. What the companies are really selling is your attention.
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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.
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It's not a misconception, it's just how people say what's happening. They're basically selling their ability to make a profile of you based on your data. It's just colloquially said as "selling your data."
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Some people think the big tech companies literally sell your data though, so IMO it's important to clarify.
There are companies that do that though, like Acxiom, LiveRamp, CoreLogic, etc. With Acxiom at least, you can buy lists like "high net worth individuals who are likely to buy a new car in the next 6 months" and get a list of names, phone numbers, and email addresses, based on data they've collected from both public and private sources.
