For Both Companies and Individuals, Social Media Power Leads to Profit
http://themarketmogul.com/the-power-of-social-media/
The Market Mogul published an article last month about how social media websites are generating large amounts of revenue by allowing companies to pay for advertising space. These ads are a high source of revenue for the companies that use them. Last year, for example, Twitter made $1.4 billion at the end of 2014 despite sluggish growth after 2013 with over 90% of its earnings coming from advertisements. Facebook made $12.47 billion with $11.49 billion coming from advertisements. Combining this knowledge with the fact that advertisers are flocking towards the more popular social media sites since they provide more revenue for the advertising company, it becomes rather apparent that Facebook is, in a sense, more “powerful” than Twitter: the more popular a site is with users, the more advertisers it has, and the more advertisers it has, the more money a website makes. If an advertiser had to choose between Facebook and Twitter for example, they would be more likely to choose Facebook, since it would generate more revenue for the advertising company. Thus, social media sites with more users have more power over the ad revenue distribution between sites.
This power dynamic also extends to the users on social media, with more popular, or “powerful” users actually making money on these platforms. And even then, the more followers you have, the more money you make since you reach a wider audience. Brands could offer anywhere from $5 to $10 per thousand followers or $100 per 100 followers, proving that popular users have the power not only to make money from their social media use, but also to influence others. Popular Snapchat users make anywhere between $1,500 daily to $100,000 weekly, with those who have more followers earning more money. One popular Viner gets about $2,000 for each sponsored vine she makes. She’s 16 years old and has around 3.3 million followers. One 24-year-old Viner, Cody Johns, made enough money off of a sponsored Vine campaign to pay off his college tuition. It makes sense that advertisers would want to partner up with him, since he can reach around 3.5 million potential customers. His brother Marcus Johns has almost twice as many followers as Cody does. Individuals like these three have enough power over a large enough audience that advertisers want to exploit that control and influence to make a profit for themselves, aiding the users along the way. This popularity detracts from that of other users, making them seem less profitable. They in turn attract fewer sponsors which gives them less power over the ad revenue distributed among popular users.