TikTok Earned $205 Million More Than Facebook, Twitter, Snap And Instagram Combined On In-App Purchases In 2023 - Social Media Explorer
TikTok Earned $205 Million More Than Facebook, Twitter, Snap And Instagram Combined On In-App Purchases In 2023
TikTok Earned $205 Million More Than Facebook, Twitter, Snap And Instagram Combined On In-App Purchases In 2023

Big social networks are pulling a massive revenue U-turn since Apple’s introduction of App Tracking Transparency. In 2020, the user privacy feature was announced and it will be implemented in 2021. It limits what data Facebook, TikTok and Snap can use for targeting ads. Big social networks are now pushing to make direct payments to users as an alternative to ad focused monetization.

“Facebook, Instagram, TikTok, Twitter and Snapchat are still without paywalls but they now all offer products/services for charge via an in-app purchase (IAP), which Apple and Google get a cut of,” says Adam Blacker, a vice-president at mobile metrics company Apptopia. “TikTok, Facebook, Instagram, Snapchat, Twitter combined have grown quarterly IAP revenue 91% since Apple introduced ATT.”

Before iOS 14.5, which introduced Apple’s privacy protections, big social networks made almost all of their money via advertising.

Higher-targeted ads result in better revenue, particularly for Facebook. Ad relevance and revenue have suffered as less data is available. Together, large social media appears to be trying direct payments from users to recover that revenue.

Snap is now offering Snapchat+ for $40/year while Twitter Blue offers Twitter Blue starting at $115/year. Both offer subscribers premium access and special features. Instagram and Facebook offer primarily payments to followers and supporters to honor their favourite creators or boost posts visibility.

TikTok primarily focuses on creator rewards, and it’s doing better than all the other social networks combined.

“TikTok’s app revenue has grown for seven consecutive quarters,” Blacker says. “TikTok has generated $205 million more than Facebook, Instagram, Snapchat and Twitter combined, via IAP revenue, so far in 2023.”

Facebook is responding. Mark Zuckerberg has announced that he will be offering a paid verification service via Instagram. Users will pay $12/month via web payments or $15/month if they subscribe in-app to get a “Meta Verified” badge on their accounts, along with some safety improvements and additional visibility or reach on the platform. Apptopia reports that the company made $56 million in app purchases in 2022. This is a decrease from previous years’ highs, however, it shows improvement on Instagram.

Instagram has surpassed $1million in monthly app revenue in February. Snap’s monthly revenue is growing every month in 2023, hitting about $125,000/month. Twitter, however, earned almost $900,000.

Maybe small potatoes. But it’s also possible that this is the beginning of something much bigger.

TikTok, however is the true giant of this area.

TikTok earned more than $350 millions in app revenue in the quarter ending in 2022. This same quarter generated just $150 millions in revenue for TikTok in 2020. These numbers are insignificant compared to the full-year revenue of last year.

“TikTok has had IAPs [in-app purchases] since its very beginning and its app revenue last year was a whopping $1.5 billion,” Blacker says. “Its IAPs are similar to Facebook’s in that users pay for coins which can be used to tip and pay for things from their favorite creators.”

It’s important to note that in-app revenue is really only material for TikTok. Essentially, the small sums that Facebook, Instagram, Twitter, and Snap are bringing in via in-app purchase are rounding errors for those companies’ overall revenues. TikTok’s case shows Facebook that in app payments and purchases can be a real, significant revenue source if it is possible to make their platforms work.

It’s a revenue opportunity that doesn’t require selling ads or taking users’ data, and it’s also a revenue opportunity that — if consummated on the web and not in an app — the platforms can keep more of. Between 15% and 30% of all in-app costs go to mobile platforms like Google or Apple.

SME Paid Under

About the Author

Adam is an owner at Nanohydr8. He really loves comedy and satire, and the written word in general.

VIP Explorer’s Club