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

submitted 1 month ago by [email protected] to c/[email protected]

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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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[–] [email protected] 1 points 1 month ago

most businesses have to run ads to turn a profit. part of the equation of every sale you make comes down to a finely balanced cost of ads vs the profit on sales of the product or service, if the cost of advertising is higher than the product, it's a product that basically just won't enter the market (yay capitalism). so ads companies like google or facebook are essentially forcing most businesses around the globe to pay them a percentage on each and every product or service sold.