Abstract: With the saturation of advertising on the web, social media, which relies on advertising to make a lot of money, has had to shift the way they generate revenue from "volume" to "unit price". So far this year, the average cost of Facebook ads has risen 171 percent, and the cost per click of ads has risen 136 percent.

With the saturation of advertising on the web, social media, which relies on advertising to make a lot of money, has had to shift the way revenue is generated from "quantity" to "unit price", which has led directly to a rise in the price of advertising units at a rate comparable to that of "rocket".

According to AdStage, the average cost of advertising on Facebook has risen 171 per cent since January, while the cost per click (CPC) has risen 136 per cent so far this year.

Not only Facebook, but Twitter's ad price has also risen. Twitter's CPM has risen 27 per cent since January;

Picture: Axios

The amount of advertising is already saturated

The phenomenon is similar to earlier perceptions that advertising is saturated and that giants need to find new ways to drive revenue growth.

Late last year, Dave Wehner, Facebook's chief financial officer, said the amount of advertising on Facebook's pages was strong longer driven by revenue growth as it is now. At the time, he predicted that advertising would continue to play a role in driving revenue growth beyond mid-2017. Until the second quarter of 2017, Wehner was emphasizing a saturation of advertising.

Advertising is the main revenue earner for social media and internet companies, but growth has slowed.

In the second quarter of fiscal 2017, Facebook reported ad revenue of $9,164 million, or more than 98 percent of total revenue, up 47 percent from a year earlier. In the second quarter of 2016, advertising revenue grew 63% YoY.

For the giants, any loss of revenue from reduced ad deliveries could be compensated for by CPM's growth.

In addition to raising fees, social media giants are also looking for other ways to generate revenue

Of course, the saturation of advertising may not have had that much of an impact. The news feeds are full of space, and there are other ways to "plug" ads.

For example, by placing longer videos at the top of the stream, Facebook can intersperse ads in the videos.

This means that even if the number of ads decreases, Facebook can earn more revenue from video-intersted ads.

Of course, the emergence of more and more blocked adware also means that people don't like ads that can be seen everywhere. Peter Fader, a marketing professor at Wharton, argues that the advertising industry is long out of date in the long run. "It's the legacy of the old world, and advertising is the only way to pay for the media."

Facebook has tried other ways, such as offering paid content. Facebook is understood to be trying to launch paid content on Instagram, which could be available as soon as the end of the year.

In addition, Facebook founder Mark Zuckerberg announced at the end of August that Facebook had decided to work with news organizations to launch a new paid content project, the Facebook Journalism Project. It plans to take the lead in working with some news organizations in North America and Europe by the end of this year. For now, however, the cost of the project will go directly to news producers, and Facebook will not charge a share for the time being.