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Dynamic pricing affects the relationship between social networks and advertisers by creating a competitive environment. Advertisers compete with each other for the best prices to reach a larger audience. This method allows social networks to charge different rates depending on the size of the audience the advertiser wants to reach.
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While many people know Facebook and TikTok as social media networks, they are actually both B2B businesses with advertisers as their main customer. Facebook, Google, TikTok, and many other social networks that incorporate an ad revenue model use a method known as dynamic pricing to charge customers different rates depending on how large of an audience they want to reach. These advertisers then compete with other sellers for the best prices.
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