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How to Monetize a Social Media App

11 November 2022Author: Lera Grechanik2471 Views

Though most of the apps in both App Store (94%) and Google Play (97%) are available to be downloaded and used for free, it doesn't mean they aren’t money-making ones. The same goes for social media. We use them daily for free, but still, their owners gain big sums of money. How do they do these? This is all about social media monetization.

Okay, what is social media monetization? To put it simply without going into the nitty-gritty, It’s how social media generates revenue. Today, the market knows several ways to monetize social media. Monetizing social media is a process that requires thorough analyses and consideration in order to choose social media business models that will be valuable for payers and bring you revenue.

Let’s talk about social media monetization and look at the social media monetization examples given by Instagram and Facebook.

Content

Ways to Monetize Social Media
Social Media App Monetization Used by Instagram and Facebook
Social Media Monetization as a Part of Celadonsoft Social Media Development Services

Ways to Monetize Social Media

In the previous article, we talked about the cost to build a social network. With information on costs and how they are calculated, you may want to know how to make your app generate revenue or, in other words, how to monetize a social media app.

Various social media monetization strategies exist that you may want to consider. For a brief description of the best social media monetization streams, go ahead on read.

Ads are the most widely used social media business model to make money from social media. This approach is preferred by Facebook, Instagram, and TikTok. The ads may be integrated with 2 ways.

Self-serve advertising is placed on a particular area of a layout.

Targeted Ads that are user-specific types of ads that appear at a certain moment of using social media and are based on users’ interests. Targeted advertisements rely on the data collected by a platform: age, location, interests, etc. For instance, Instagram applies this method. Targeted Ads on Instagram while scrolling through feeds or stories.

Freemium or Subscription

This model of social networking monetization is also called “pay-to-use”. Medium, YouTube, and Telegram use have adopted this approach. Such social media are free to sign up for and to be used but free features and functionality are limited. If a user wants to get full access to the platform, they have to subscribe.

Subscriptions arrive at various types and lengths. There are weekly, monthly, and annual subscriptions. Though users may prefer monthly subscriptions, the annual one is better for social media owners as It facilitates longer user retention. To lure users to buy a yearly membership, you may offer them deals and discounts that will make the total sum over the year to be lower than the total sum of a monthly subscription used for a year.

In-App Purchasing

IAP is not the most common strategy applied to social media. If you’re a TikTok user, you probably know what we’re going to talk about. The sense of such social media app monetization is to offer users to purchase a value that may be stickers, in-app currency, gifts, or filters. What kind of value to propose depends on the social media type and its concept.

Venture Capital

Venture capital may be considered a monetization strategy, too. This is a great monetization who those who developed a hit but have no intentions to maintain the product. Once the work is done and social media has reached its boom, owners may think about selling the product.

This is what exactly was done with Twitter.

Social Media App Monetization Used by Instagram and Facebook

Instagram

Do you know Instagram was monetized only after Facebook purchased it? It is true, it’s had been functioning without any social media monetization models for 2 years since its launch. Perhaps now we are used to seeing Instagram the way it is, and we can hardly remember what Instagram was originally. Let's take a look at what strategies Meta implemented to make Instagram profitable.

Carousel Ads

Carousel is a variation of Instagram posts, but they contain multiple media. The number of images/videos in a carousel can be up to 10. Such posts can also be sponsored and appear in the targeted user's feed.

Instagram Stories

Stories have become an element of Instagram's monetization strategy. Like sponsored posts, sponsored stories fit seamlessly into the Stories flow. They appear when a user scrolls through the Stories feed.

Sponsored posts are labeled “sponsored” under the name of the account being promoted. Also, a link can be attached to such Stories and the user can swipe the story up, which will take them to the advertiser's site or Instagram account.

Instagram eCommerce

eCommerce is a relatively new thing on Instagram but high hopes are pinned on it. Instagram has become a place that brands can use as an additional sales channel. Now, accounts may have a separate section with a store catalog. It is worth admitting that this innovation has been very successful.

Facebook Ads

As both social networks are owned by Meta, it was a wise move to interconnect the monetization strategies of both. Through Facebook Ads, the users have got the chance to launch ads on Instagram even though they aren’t registered on Instagram.

Facebook

Facebook's success and large figures in their revenue own to social media monetization. Their revolutionary approach to social media monetization works upon the formula: Users Data combined with AI/Ml algorithms processing this data result and Advertisers results in 93% of Facebook’s revenue coming from their monetization. Let’s look at how it works.

Facebook collects and processes data about users.
Businesses buy the targeted ads based on the data collected: clicks, likes, shares, etc.
The ads are organically built into the user’s feed and stories.

Monetization streams are similar to Instagram’s one, which is quite natural taking into account that both social networks are owned by Meta. Where the ads can be placed:

Promoted or Boosted Posts

These kinds of posts appear in targeted users’ feeds as an advertiser pays a fee for them to appear there.

Sidebar Ads

In the web version of the social network, there is a column on the right where advertisements are placed. Advertisers can customize their ads and place them there for a fee.

Social Media Monetization as a Part of Celadonsoft Social Media Development Services

Although a broad variety of social networks are present on the market, where each has its own idea, concept, and specifics, their potential has not yet been entirely ruled out. The public cheers for new social media. However, whether your product will reach the public and how wide an audience it will reach relies largely on the development team with whom you work.

Celadonsoft's development team is a full-service provider. This means that we shoulder all the work, not just the technical part. We have a stake in your success and in making the developed social network see the world. To do that, we determine which business model will work best and adopt monetization at the application development stage inside our services for professional mobile app development.

You can trust us to create a social media app, and we will use our best endeavors to make your idea appear on the screens of many people's smartphones

Lera Grechanik,
Marketing Manager

Areas of responsibility - brand and growth marketing. Strongly believes that software development is an art and marketing is not just about sales but about sharing your passion. Her educational background in the field of business and marketing allows her to create expert content and help others to grow and expand knowledge.

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