Social Media Platforms Competing for Engagement and Revenue
Project 8
Social media platforms continue to be an influential ad medium that drives revenue. When it comes to advertising, Facebook remains one of the most widely used social media sites among adults in the U.S. and businesses. 77.6% of businesses have reported using social media to promote their business. Since 68% of U.S. adults are Facebook users, many businesses choose Facebook as their top used platform.
Ideally, businesses use social media platforms for many reasons. Some common benefits of social media for brand building includes:
1. Increasing brand awareness
2. Humanizing one’s brand
3. Staying top of mind
Some ways that social media helps promote business growth includes:
1. Increasing website traffic
2. Boosting sales
3. Partnering with influencers
Social media also benefits businesses by promoting content, engaging with customers and audiences, and learning more about the customers
With the benefits of social media platforms never-ending, it is crucial for businesses to join the fad in order to keep up. The graph shows that in 2019, Facebook was the most popular social media app in the U.S. based on engagement minutes per month. The second most popular social media app in the U.S. based on engagement is TikTok.
Facebook is a worldwide popular platform for businesses and consumers. The second most popular platform is TikTok. Other popular social media platforms include Instagram, Twitter, LinkedIn, and YouTube.
According to the graph, in 2019, TikTok had an average of 498.09 minutes per month of engagement by consumers. The benefits of TikTok for a business includes:
1. TikTok has a growing audience
2. The audience is international
3. TikTok offers video marketing
4. TikTok’s app makes it easy to connect with an audience
5. TikTok offers influencer marketing
6. Content can be original and engaging
The social media app, Facebook, designed by Mark Zuckerberg, is built in a way that is easy for businesses to promote themselves through advertising. The social media platform allows businesses to:
1. Reach billions of potential customers
2. Build a huge email list
3. Lower one’s marketing expenses
4. Target audiences by location, demographics, and interests
5. Gain insights into one’s audience
6. Build brand loyalty
7. Increase one’s website traffic
8. Boost SEO
9. Reach people on their phones
10. Spy on competitors
The above graph shows the social network advertising revenue in the U.S. in 2019, by company, in billion U.S. dollars. Facebook received the most revenue, $29 billion, compared to other platforms such as Instagram, LinkedIn, and Pinterest.
Facebook’s revenue comes from ads on Facebook and Instagram. Ads are displayed on Facebook’s main social-networking site, as well as Instagram, Messenger, and other third-party affiliated websites or mobile applications. Most of the ads are “pay-per-click,” meaning that advertisers pay Facebook each time a person clicks on an ad. Marketers also pay for ads based on the number of impressions delivered.
While in both graphs one can see that Facebook received the most engagement in 2019 and had the most revenue, TikTok doesn’t display the same correlation. TikTok was on the rise in 2019 based on engagement, but it did not receive any revenue until 2020. In June of 2020, TikTok launched TikTok for business as a way for brands to run their own ads within the app. Since the company has established its ad program, it has become one of the main ways the app gains revenue.
Overall, the amount of engagement on social media platforms such as Facebook and TikTok continues to rise. Based on the two graphs, there is a correlation between the amount of engagement and the amount of revenue each platform receives. Facebook continues to be the number one platform for businesses to get involved with their audiences.
