ARPU, or average revenue per user, is a key metric for attention merchants like Facebook. It assesses the ability of the platform to monetize its users. For instance, in 2021, Facebook’s ARPU worldwide was $11.57. Its ARPU was driven by US & Canada ($60.57), followed by Europe ($19.68) and Asia ($4.89), and in the rest of the world, it was $3.43.
Understanding Facebook’s ARPU and why it’s so important to its businessmodel
The ARPU, or average revenue per user, is a key metric to track the success of Facebook – now Meta – family of products. For instance, by the end of 2021, Meta’s ARPU worldwide was $11.57. While in US & Canada, it was $60.57; in Europe, it was $19.68; in Asia, it was $4.89; and in the rest of the world, it was $3.43.
ARPU, or average revenue per user, is a critical measure to assess Facebook’s ability to monetize its users. ARPU is given by total revenue in given geography during a given quarter, divided by the average of the number of monthly active users in the geography at the beginning and end of the quarter.
As specified on Facebook financials: “this is calculated by computing revenue by user geography based on our estimate of the geography in which ad impressions are delivered.“
Important Note: It is important to notice that, as reported on Facebook financials, “ARPU includes all sources of revenue; the number of MAUs used in this calculation only includes users of Facebook and Messenger as described in the definition of MAU above.” That means the metric might be biased in favor of Facebook, as it comprises all the sources of revenues (comprising Instagram and WhatsApp). This implies that in part the monetization ability of Facebook might also be due to the increase in revenues from other platforms such as WhatsApp and Instagram. We can’t know for sure as this is not broken down in Facebook financials.
Why ARPU is a critical metric for Facebook’s financial success
The critical business metrics Facebook tracks comprise:
Daily active users (DAUs): daily active users are defined by Facebook “as a registered Facebook user who logged in and visited Facebook through the website or a mobile device, or used the Messenger application (and is also a registered Facebook user), on a given day.“
Monthly active users (MAUs): monthly active users are defined by Facebook “as a registered Facebook user who logged in and visited Facebook through the website or a mobile device, or used the Messenger application (and is also a registered Facebook user), in the last 30 days as of the date of measurement.“
Gennaro is the creator of FourWeekMBA, which reached about three million business students, executives, and aspiring entrepreneurs in 2021 alone | He is also Head of Enterprise Sales for a high-tech startup, which he helped grow at a double-digit rate since the onset | In 2012 Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
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