8 ways Facebook and Twitter make money

It may be unclear to the casual observer just how Facebook and Twitter monetize their hugely popular social sites, but both companies are raking in the ad dollars. These eight examples detail the ways Facebook and Twitter make money from their users.

01 fb twitter money intro
Credit: Shutterstock
Social Ads Were 'Native' Before Native Was Cool

The association between social media and native advertising is the definition of a symbiotic relationship. Virtually every advertisement placed on social media is a native ad, or "a form of online advertising that matches the form and function of the platform on which it appears," according to Wikipedia. Native advertising has played an important role in the evolution of social media, and native ads would not be what they are today without the rise of the popular social platforms. Here's a quick look at all the ways two of the largest social sites, Facebook and Twitter, make money.

02 fb ad placements
Facebook Ad Placements: Mobile, Desktop, Right Column

Facebook reorganized its advertising infrastructure to help marketers focus on specific objectives, but advertisers can still start their campaigns with specific formats in mind. Facebook's advertising guide is designed to help brands determine the format that works best for them, be it mobile news feeds, desktop news feeds or right-column ads. These formats comprise the bulk of advertising on Facebook, and they're increasing in popularity as Facebook's ad business grows.

03 fb post engagement
Facebook Objectives: Clicks, Conversions and Post Engagement

Website clicks, conversions and page post engagements are three of the nine objectives available to brands that want to advertise on Facebook. If clicks are a priority, brands can include call-to-action buttons to encourage users to take specific actions after reaching landing pages. Website conversion objectives include signing up for newsletters or buying products. Finally, page post engagements are meant to generate Likes, comments, shares and views.

04 fb app installs
Facebook Objectives: Page Likes, App Installs and App Engagement

Brands that advertise on Facebook can also increase page Likes and build relationships, and use mobile apps to drive installations and user engagement. Page Likes target relevant audiences based on location, age and interests. App installs make up the bulk of Facebook's revenue today, and mobile game publishers drive the majority of them. These ads are purchased on a per-install basis and usually include call-to-action buttons. App publishers can also promote their apps on Facebook to drive engagement or encourage users who have already downloaded an app to open it again. 

05 fb event responses
Facebook Objectives: Event Responses, Offer Claims and Video Views

Two of the final three Facebook objectives, event responses and offer claims, get specific, and the last goes right to the heart of the company's future in advertising. Brands can promote upcoming events via ads that encourage more responses from specific users. Offer claims are designed to attract customers to nearby businesses with promotional offers or coupons. Finally, Facebook's long-delayed video ad format is now available, and brands can embed video in their ads and then pay Facebook on a per-view basis.

06 twitter promoted trends
Twitter Promoted Trends

Trending topics are the bedrock of the real-time conversations that take place on Twitter. Twitter constantly filters and organizes a list of the top 10 trends, and they can be tailored to users' locations. A Promoted Trend sits at the top of the list for 24 hours and almost always includes a hashtag that's then promoted by the brand. Twitter says companies should use Promoted Trends to boost conversations about their brands, increase purchase consideration and develop long-term impact.

07 twitter promoted account
Twitter Promoted Accounts

Promoted Twitter accounts typically appear in the "Who to Follow" section of the site, which sits in the side column on the main Twitter page. The premise and objective of these ads is simple: gain more relevant followers and develop a community of advocates. Promoted accounts show up at the top of the Who to Follow list, along with two related recommendations. These simple ads can also appear in the users' timelines, and on the discover tab and profile pages. Promoted accounts are sold on a cost-per-follow basis, which means advertisers only pay when users click to follow promoted account placements

08 twitter promoted tweets
Twitter Promoted Tweets

Promoted tweets are the most native ads on Twitter. Advertisers can choose to either promote a tweet that was first published organically or create a new ad in the form of a tweet. Promoted tweets can be targeted at Twitter users who don't already follow a brand based on demographics and interests. These ads are purchased on an engagement basis, so brands only pay Twitter when tweets are "favorited," replied to or "retweeted." Promoted tweets appear in users' timelines and at the top of relevant search results, and they are syndicated to some popular third-party clients, including Hootsuite.

09 twitter objective ads
Twitter Objective-Based Ads

Twitter recently followed Facebook's lead by tailoring its ad structure to meet more specific objectives. The company is moving away from its cost-per-engagement model and prioritizing objectives such as app installs, follows and leads. Instead of guessing which ad format might perform best for a key objective, campaigns can now begin on Twitter with the end goal in mind. Twitter and others are rapidly coalescing around an objective-based framework for ads. Some key Twitter objectives include growing followers, increasing website clicks and conversions, and driving tweet engagements, app installs and leads.