Advertising vs Subscription: How Do Social Media Apps Make Money?

Which business model do you prefer?

Photo by Alexander Mils on Unsplash

Social media companies often say, “Our mission is to connect the world,” or “to give you a platform to express yourself” — but make no mistake. They are first and foremost a business, and businesses exist to make money.

Either as a marketer or as a user, you should be aware of this, so you can make use of the platform in your best interests.

So, how do social media companies make money? There are plenty of business models available, but here are the two most common ones.

Advertising Model

Photo by Joshua Earle on Unsplash

“If you’re not paying for the product, you are the product.”

— Unknown

Are you paying to use social media? If your answer is no, then it’s likely that the platform uses an advertising revenue model.

This is the traditional media model, and it’s fairly straightforward: The platform offers its services for free, and gets its profits from ads.