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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The differences in ad revenue per user for different social media platforms indicate the varying profitability and effectiveness of advertising on these platforms. For instance, Facebook and Instagram generate nine dollars per user, which is significantly higher than TikTok's one dollar per user. This suggests that advertisers might get a higher return on investment when advertising on Facebook or Instagram compared to TikTok. However, it's important to consider other factors such as the target audience, content type, and engagement rates on these platforms.

The potential for growth in ad revenue for platforms like TikTok is significant. Despite currently generating less ad revenue per user compared to platforms like Twitter, YouTube, Facebook, and Instagram, TikTok's user base is rapidly growing, which could lead to increased ad sales. Furthermore, as the platform continues to innovate and attract more advertisers, it could potentially increase its revenue per user.

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