Has Social Media Lost Its Meaning Over Economics
Has Social Media Lost Its Meaning Over Economics
Written by: Morgan Johnson
Social media has exploded over the past decade, from Myspace to Facebook to Twitter. However, as Facebook and Twitter have become extremely popular in the past five years, many believe social media has lost it’s true meaning. As social media companies continue to be in demand, the cost to maintain their services rises, causing them to find a means to afford running their company. In many of these cases advertising and even promotions have to be made in order to bring in revenue, however, many believe these ads and promotions take away from the meaning of social media by distracting viewers from their friends posts. The truth is, though these advertisements and promotions may be distracting, they are necessary in order for Facebook and Twitter to remain free to the public. It really comes down to would one rather want free social media or pay for adfree social media, however, the smart choice is obvious: free social media.
Facebook itself has 1.23 billion users, which, comes with costs over a billion dollars a year to run, almost $83 million a month, thus ads are necessary to keep the cost of Facebook free. According to Splatf.com, 85% of facebook’s revenue comes from advertising. Also, Facebook has partnered with other companies to bring in revenue, such as Zynga, the company that makes Farmville and other Facebook popular games -- bringing in almost 12% of facebook’s revenue. Other popular companies, such as Netflix and the Washington Post, have bought around $8 million of Facebook revenue. For those who may complain about the number of ads on Facebook increasing, they are wrong. Over the past six years Facebook has gone from 98% of their revenue coming from ads, meaning there was a lot more in the past, compared to the now big drop to only 85% of revenue coming from ads. Because social media is in such high demand, the cost to run these sites raises, and with that, more people are willing to put up with ads to be supplied with social media. Thus, it is obvious that the company is making a conscious effort to keep ads from overpowering the social media aspect of their website, while still keeping it free.
Twitter is another great example of a social media company who must impose ads on their website in order to keep the social networking free for users. Though Twitter may only have 100 million users compared to facebook’s 1.23 billion, over 300 million “tweets” are sent a day, generating costs to support keeping the site running. Instead of visible ads like Facebook, Twitter has “Promoted Tweets” which is paid “tweet” of a company’s product that is promoted to users. Twitter has even made things such as a “Promoted Account” which a company pays Twitter to be displayed under the “Who To Follow” tab on normal user’s Twitter accounts. Once a user follows these promoted accounts, the account is charged on a “Cost-per-Follow” basis. This not only benefits Twitter, but other companies too; Twitter gets the revenue and the “Promoted-Account” or company gets the advertising. Which brings up the idea that social media may not really be social media anymore, but business. However, like any business, consumer happiness is important to keep their product selling, therefore, like Facebook, Twitter makes revenue by advertising, but keeps it as limited as possible -- not to be distracting to users -- and allows users to social network free of cost.
After seeing how many users these social networking companies must support without selling their product, it is evident that keeping ads on their websites is necessary to keep users from paying for their social media. Users must understand that these companies need to pay their employees, pay to hold their website url, and any other costs that may come up in a business. These things must be paid for somehow and the only logical solution is to keep ads and promotions on these sites. If these sites were to go ad free, they would be forced to sell their product for high prices, creating problems with users who may not be able to afford or want to pay for social networking. If users want to continue using their Facebooks and Twitters, they need to deal with the fact that ads and promotions are supporting their free use of social media. Though they may be visible or distracting, it’s a small, negative externality of free social media compared to the large, negative externality of paying for social media.
Works Cited
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