https://www.investopedia.com/stock-analysis/032114/how-facebook-twitter-social-media-make-money-you-twtr-lnkd-fb-goog.aspx

 •  •  •  • How Facebook (Meta), X Corp (Twitter), Social Media Make Money From You •  •  •  • 

 ¶ Key Takeaways:

 • Social media companies such as Meta and X primarily make money by selling advertising.
 • Television, newspapers, and media companies made money through advertising long before social media started to.
 • In December 2025, Meta had 3.58 million daily active people worldwide and an average revenue per person (ARPP) of $57.03.
 • Meta's ARPP comes primarily through profits earned from advertisers who use the platform to reach customers.

An enormous number of people use social media each day, so it's a fair question to ask, "How do social media companies make money while offering so many free services?"

As of April 2026, Meta's (META) company Facebook held 74.29% of the social media global market share, while Instagram held 6.99%. X (formerly Twitter) held 5.65%, while LinkedIn held less than 0.36%.

Such volume is part of the answer to the question of how these companies are making money. But it doesn't tell the whole story. Here we explain exactly how the top powerhouse social media companies translate all that volume into cash. See: https://www.investopedia.com/terms/s/social-media.asp

 ¶ Important:

On Oct. 28, 2021, Facebook Inc. changed its name to Meta Inc. and later changed its stock ticker from FB to META effective June 9, 2022.

 ¶ Making Money Through Advertising:

This isn't a unique observation, but it's a crucial one: If you're not paying for the product, the product is you. The real transaction here isn't you receiving enjoyment in the form of a free temporary distraction created by a media company at great expense. That media company is renting your eyeballs to its advertisers.

For many people, this is most obvious in the television industry. CBS doesn't come up with a new episode of a top show every week strictly to entertain and please viewers. It's because you and 12 million other people will watch that episode, and thus pay at least subconscious attention to the 16 minutes of commercials that are interspersed throughout it.

For a car manufacturer or fast-food restaurant, there are few more efficient ways to grab customers' attention, something CBS and its rival networks are well aware of.

For social media, the importance of the number of viewers glued to their computer or smartphone screens is every bit as important (if not more so) as it is to commercial television. There's a reason why Meta's 10-K filing with the U. S. Securities and Exchange Commission (SEC) includes the acronym ARPP, which means average revenue per person. Meta also uses the acronym DAP, which means daily active people. This metric has replaced monthly active users.

Meta's ARPP as of December 2025 was $57.03, an increase of 15% year-on-year. Its DAP figure at that time was 3.58 billion, up from 3.35 billion in December 2024. As the company states in its 2025 10-K, "Trends in the number of people in our community affect our revenue and financial results by influencing the number of ads we are able to show, the value of our ads to marketers, as well as our expenses and capital expenditures."

When Meta founder Mark Zuckerberg went looking for a chief operating officer in 2007, it's no coincidence that he selected not an engineer nor a technologist but a vice president with a background in advertising sales. Sheryl Sandberg had spent 6.5 years selling advertising as a vice president at Google (GOOG).6 Sandberg left Meta in 2022, after transforming Facebook into a "moneymaking machine." Her replacement was Javier Olivan, who has expertise in product development and market launches.

 ¶ Fast Fact:

After its initial public offering (IPO) in 2012, Meta's stock price rose from about $38 per share to a peak of $790 per share on Aug. 12, 2025, an increase of over 1,900%.

 ¶ Increasing Users to Increase Advertising:

Growing Meta's user base to the point where it reached critical mass was obviously important to the company's operations, but only to the extent that it provided something to attract advertisers. To an uninterested observer, committing $19 billion to acquire the texting application WhatsApp might sound like the height of dot-com-era hubris and recklessness.11 But it wasn't.

When Meta acquired WhatsApp for (for $19 billion), that company had over 450 million monthly active users, and it was believed to be on the path to a billion. To Meta management, this meant more users to sell as a unit to companies looking to advertise their products or services. Every acquisition Meta has transacted since, such as Instagram for $1 billion, has been conducted with the same goal in mind.

 ¶ Other Ways Social Media Companies Make Money:

Advertising isn't just a way for Meta and other social media companies to perhaps earn a little bit of revenue in between hosting family photos and personal musings. It's the very purpose of those sites.

However, in recognition of the potential perils of having too much of the company's fortunes tied solely to advertising, in 2021, Mark Zuckerberg initiated a new corporate strategy at Meta to eventually dominate what has come to be known as the "Metaverse." His goal was to create the means for people to spend most of their time in virtual worlds. As of 2026, and after spending $80 billion on it, Zuckerberg's strategy has been unsuccessful.

 ¶ Fast Fact:

For fiscal year 2025, Meta's advertising revenue was $196.17 billion, making up over 97% of total revenue.

Other social media companies are also exploring new ways to increase their revenue. For example, after Elon Musk bought Twitter in 2022, he rebranded it as X Corp. and changed the site's blue "verified" checkmark system. These checkmarks were once given to prominent or important accounts (such as journalists, politicians, celebrities, newspapers, and other media accounts) to show that their identities had been verified and could be trusted.

Under the new system that Musk implemented in 2023, however, checkmarks became a symbol that users had subscribed to X Premium. X Premium subscribers receive benefits including editable posts, fewer ads, longer posts, and more robust security measures. The Premium service costs $8 per month or $84 per year.
Does Meta Make Money From My Facebook Profile?

Meta does not make money directly from any content that you post. That includes photos, videos, text posts, or any other form of communication. Meta only makes money by placing advertisements throughout its platform that are paid for by companies or individuals.

 ¶ What Types of Advertising Does Meta Use to Make Money?

The main types of advertising Meta uses are self-serve advertising, targeted advertisements, Facebook Messenger ads, video ads, Facebook Mobile, and data generation.

 ¶ How Much Money Do One Million Facebook Views Make?

On average, a long-form video with in-stream ads with one million views can earn you between $2,000 and $5,000 on Facebook. Short-form reels can earn anywhere between $1,000 and $3,000.

 ¶ The Bottom Line:

Social media companies primarily make money from advertising revenue. Some platforms, such as X, are experimenting with other ways to make money, such as subscription services. However, most social media users expect their accounts to be free.

Using an advertiser-supported model, rather than charging each user individually, is the easiest way for Meta and other social media companies to attract as many users as possible. The more users on the site, the greater the number of advertisers willing to engage them, and the more those advertisers are willing to spend.


 •  •  •  • The End •  •  •  •