Facebook Business Model – How Facebook Generates Their Revenue – Facebook is a social media platform, probably one of the biggest with over three billion users. Thus making it a perfect advertising and marketing platform for users where you can find all kinds of products and services at relative ease and comfort. Facebook was created in 2007 and since then there has been improvements and developments to match user’s preference, it has developed in such a way that Facebook can not only be called a social media but also an online mall. By connecting people with each other and performing their primary role as a social media thereby creating a platform where people that almost do not know each other can get to relate with one another based on what they want by sharing information and data they want to.
So, imagine Mr A wants to get Italian made shoes but stays in Canada, and does not want to travel to Italy and wants to get the shoe at a very affordable price. Mr A could come on Facebook and search people who deal in Italian made shoes and get a whole lot of results that he might not be able to go through or try to find ask people on websites where he could get the shoes from but might also have trust issues. This is where the Facebook business model comes in.
Facebook Business Model provides specific advertisements to Facebook users based on what they regularly do on Facebook. Facebook target advertisement on users by advertising the things they regularly search for or events they regularly do on Facebook. Facebook is more than just another social media application, it’s also a marketing platform and like any marketing platform, Facebook has advertisements to talk about the products and services they render, how to get it, where and why you may need it as a customer or Facebook user. But there was an issue with these advertisements, users complained about irrelevant advertisements popping up, so Facebook came up with Facebook business model, thereby bringing relevant advertisements to Facebook users based on their history on Facebook.
It created more revenue generation for Facebook, because by using Facebook business model they were able to assign specific advertisements to targeted Facebook users by the actions of the Facebook users on Facebook i.e. based on what the user likes, clicks on, shares, posts, search for and so on. This made it easier for users to locate or find whatever they want on Facebook. Advertising represents more than ninety-eight percent of Facebook generated revenue annually because of the increasing market on Facebook and the ever-demanding users, so by targeting specific advertisements to particular users, business is done with ease.