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The factors that contribute to the difference in ad revenue between different social media platforms include the number of active users, user engagement, the platform's ad targeting capabilities, and the cost per impression. For instance, platforms with a larger user base and higher user engagement, like Facebook and Instagram, tend to generate more ad revenue. Additionally, platforms that offer more sophisticated ad targeting options can charge higher rates. The cost per impression also plays a significant role; for example, Facebook's average cost per 1000 impressions has been increasing, contributing to its high ad revenue.
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Since the pandemic accelerated online spending to $26.7 trillion in 2020, the average starting cost of 1000 impressions for a Facebook ad went up with it. For example, the average starting CPM in 2019 was around $5.12, but by May 2020, it had risen to $7.19. In October of 2021, Facebook's average CPM is $11. Now compare that to TikTok, which brings in $1.3 billion in annual ad sales. In 2020, Facebook generated around $84 billion. In fact, for every one dollar per user TikTok makes, Twitter makes five, YouTube makes seven, and Facebook and Instagram make nine.
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