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The Reasons Behind Facebook's Rising Revenues

The Reasons Behind Facebook's Rising Revenues

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    Feb 22, 2016   Author : admin

Posted in: OPINION

The incredible success story behind Facebook just keeps on going, doesn’t it? With around 1.59 billion active users, this social media platform accounts for 6% of all time spent online. Its popularity shows no signs of slowing down any time soon.

This is in stark contrast to the recent slowdown in Twitter figures. While the rival social media site struggles to entice new users, Facebook just keeps on growing. 

Perhaps even impressive is the fact that the company has also managed to drive excellent revenues, something that has proved to be beyond the grasp of many other high profile technology firms. So, how have they done it?

Selling Ads More Cleverly

Facebook has been steadily growing its income and since a high percentage of that revenue comes from ads you might think that there are now a lot more ads on screen.

Hang on a second, though. Isn’t it the case that we are now seeing fewer Facebook ads than before? The truth is that the social media giant has cleverly worked out a way of selling fewer ads for higher prices. This is something that they do to promote a feeling of scarcity and of their ads being premium content. 

Image via TechCrunch

The huge amount of data that they hold on users also means that they can allow advertisers to target their ads more effectively, meaning that they can charge more. In total, advertisers gave them $3.59 billion in 2015.

Mobile Ads

One of the most spectacular increases in the Facebook revenue stream has been that of mobile ads. These now represent around 78% of their overall revenue, which is an increase from 66% in the previous quarter.

Facebook has managed to wring more and more money out of their mobile ads every quarter, as they cash in on the growing number of mobile users across the world.  

It remains to be seen how long Facebook can keep on earning more money than in the previous quarters. However, the company has been spending a decent amount of its recent profits on innovations, such as virtual reality, to try and stay ahead of the game. 

Image: Forbes | MYC Writer: Robert Bell

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