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How do Facebook and Google Make Money? 46% Are Clueless

facebook and google

The results of a survey conducted last August by The Search Agency and Harris Interactive are now in, revealing that nearly half of Americans have a poor understanding of how online brands like Facebook and Google make money.

The survey, which was given to about 2,000 adults from various parts of the country, also asked respondents to describe how they thought these types of companies make money. The results indicate how online companies can become wildly successful even if their customers don't understand how they get paid.

Only 18% Have a "Strong" Understanding of Facebook's Monetization

A total of 54% of respondents either "strongly" or "somewhat" agreed with the statement, "I understand how Facebook makes money." However, just 18% of these individuals selected the "strong" option, with twice this number saying they "somewhat" understand. It stands to reason that many of those who responded with "somewhat understand" actually have an incorrect understanding, or simply responded this way out of overconfidence.

At the same time, 46% were willing to admit that they really do not understand how Facebook generates revenue. The question is, would Facebook's revenue increase or decrease if more people knew that clicking on ads is how the site makes most of its money?

More People Understand Search Revenue

Even though search engines and Facebook make money in very similar ways, far more people understood search revenue as opposed to social networking revenue. Nearly 80% of respondents said they "strongly" or "somewhat" understood that advertising running along with search results is how search engines earn their keep.

However, users could also check off other methods of monetization that they believe search engines use. Some of the answers are actually somewhat humorous:

  • 20% believe that certain search users are paying for extra premium features
  • 29% believe that some sort of annual dues are being paid, perhaps by companies to Google and other search engines (for higher ranking)
  • 36% believe that search engines make money by selling the personal data of users to internet marketers

How Many People Actually Click on Ads?

To conclude their survey, the researchers asked respondents to say "yes" or "no" to the following statement: "I click on advertisements while using search engines." The results indicate how lucrative online ads can be, even if most people never click them. The following percentages indicate how many people click ads while using search engines:

  • 22% of all users
  • 30% of those making less than $35k annually
  • 19% of those making more than $75k annually
  • 26% of high school graduates and those with less education
  • 19% of college graduates
Ryan Lundin

Posted on 9th January, 2013 by Ryan Lundin

About Ryan Lundin

Ryan Lundin is a content curator, manager, editor and writer from Marquette, MI.

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