Advertisers on Facebook are focused on the difficulty of ad creation and running, but there’s another side to advertising: the potential earning potential. The generation of income from online advertising is often a confusing matter, and this is partially because not everyone understands how it works. Is Facebook really sharing ad revenue with participating companies? And are they really making back their money.
Yes, Facebook shares its ad revenue with third parties
Facebook’s revenue sharing program is relatively new. It was launched in 2015 as part of the company’s bid to expand its advertising network and grow its share of the digital ad market.
The program allows advertisers using third-party partners like Twitter and Pinterest to buy ads on Facebook or Instagram, and then share in the revenue generated by those ads.
For example, if you purchase a sponsored story on Pinterest, Pinterest will pay Facebook a fee for all impressions (views) that are delivered through the service. In turn, Facebook pays Pinterest a percentage of any sales made through those ads (though they’re not clear on how much).
Facebook shares its ad revenue only with approved third parties
Advertisers must be approved by Facebook before they can buy ads on the site, but anyone can create and share content on Facebook.
When an advertiser creates an ad campaign and buys space on Facebook, Facebook takes a fee from that advertiser. In 2015, Facebook earned $17 billion in mobile ad revenue alone, according to eMarketer.
Facebook does not share ad revenue with all third parties
Facebook is a free service, and it’s free because you are the product that is sold to advertisers.
Facebook does not share any of its advertising revenue with any third parties who provide services on its platform. This includes app developers, game developers, music streaming services and video streaming services.
Facebook does not share any of its advertising revenue with anyone else. The only exception is when Facebook buys an ad from another company and pays them to run it on Facebook. In this case, Facebook gets the money back from their customers (advertisers), but they do not share any of their profits from those ads with other companies in any way at all.
FB shares ad revenue with any advertiser that meets its set criteria
Facebook’s revenue sharing program is called the Facebook Audience Network, and it allows advertisers to run ads on other websites and mobile apps. The social network says it shares a portion of the revenue generated from these ads with the publisher partners who display them.
Facebook doesn’t provide details on its revenue sharing rate, but as an example, an ad appearing on a mobile application could earn Facebook $0.10 per thousand impressions (CPM) or more. This means that if an ad has 1 million impressions, you’d receive $10,000 in revenue share from Facebook.
Last year, the social network reported an average Revenue per User among ad-supported users of $33.76
There are a lot of people who aren’t happy with the way Facebook treats its users and how much data it collects on them. But Facebook has a business to run and revenue to earn, so it needs to make money in order to survive.
Here’s how Facebook makes money:
- Advertising. That’s it! The company might have other products like Messenger and WhatsApp, but they’re not as important compared to ads as they were before.
- In 2017, Facebook reported an average Revenue per User among ad-supported users of $33.76. Last year, the social network reported an average Revenue per User among ad-supported users of $41.86 — up from $39 in 2016.
- And those numbers are only going up as time goes by because the company continues to grow its user base every quarter (there are now more than 2 billion monthly active users).
That’s a lot of dough! But how will it all break down between each member? There are some ways to figure this out
The simplest way to figure out how much money you can make from Facebook is to take a look at the ad revenue breakdown.
The first step is to look at your personal share of the revenue. According to Business Insider, if you have 100,000 followers on Facebook, you can expect to make $1200 per month from ads. If you have 1 million followers, that number jumps up to $3200 per month. That’s pretty impressive for just sharing content on a single platform.
Facebook does not share ad revenue with members
It does not make money from the adverts that appear on your personal profile page, or from any other content you post on the site. Instead, Facebook makes its money from selling ads on third-party websites and apps that use its advertising network AdSense.
Ads on Facebook are targeted at users based on a number of factors, including: their interests (as they’ve told you in the About section); their location (based on where they live and what they do); their age range; and so on.
Facebook also sells ads to third-party companies who want to reach people who have already liked their page or signed up for an account there.
Conclusion
Facebook is quickly changing the face of online advertising, whether you like it or not. As time goes by, it will be interesting to see how other companies, like Google and Twitter, follow suit. Most likely we’ll see a lot more ads on these new and upcoming apps as well, which can only spell bad news for us users.