Since Apple’s new privacy policies made advertising more difficult for social-media companies, big brands like Snap, TikTok, and Facebook have focused on in-app purchases—and TikTok is winning.
- Changes by Apple have forced social-media companies to look to other areas for revenue, such as in-app purchases.
- Platforms like Snap and Twitter have started offering premium app services for a yearly or monthly fee.
- By offering in-app purchases, social-media companies can also cut out any fees they may have had to pay to Google or Apple when collecting revenue from advertising.
- TikTok, in particular, performs better than all other social-media platforms as it focuses on creator rewards.
- So far, in 2023, TikTok has generated $205 million more than Facebook, Instagram, Snapchat, and Twitter combined, Forbes reports.
Why it’s news
Apple’s App Tracking Transparency limits the data platforms like Facebook, TikTok, Snap, and Instagram can access for targeted ads. As a result, social-media companies have looked elsewhere to make up for lost revenue.
Social-media companies have struggled to compete with TikTok as it draws in more users, particularly from a younger demographic. While other companies are using paid verification programs to boost revenue, TikTok is increasing profits in other ways.
Last month Meta Platforms CEO Mark Zuckerberg announced that users who want a “Meta Verified” badge on their accounts can join a $12 monthly subscription. In 2022, Meta brought in $56 million from in-app purchases, Forbes reports.
In February, Instagram reported an in-app revenue of $1 million. Twitter had around $900,000. Snap brings in about $125,000 per day.
At the end of 2022, TikTok brought in around $350 million in in-app revenue. By comparison, just two years before, in the final quarter of 2020, TikTok’s brought in $150 million.
Unlike other social-media apps that are just now adding in-app purchases, TikTok has incorporated this system since its beginning. Much of TikTok’s purchases come from users buying tokens or coins within the app that they can then send to their favorite content creators.
While TikTok may be winning in the in-app purchase competition, its numbers pale in comparison to overall revenue from major companies. For example, Meta’s revenue at the end of 2022 was around $116 billion. Meanwhile, TikTok’s total revenue was around $11 billion.