Social media apps. Flickr Image.
Social media platforms such as Facebook (NASDAQ:FB), Snapchat (NYSE:SNAP), Twitter (NYSE:TWTR) and Pinterest (NYSE:PINS) are using the average revenue per user or ARPU metric to measure their business performance.
In particular, the ARPU metric measures how well the businesses monetize from their user base.
For Facebook, ARPU is defined as total revenue in given geography during a given quarter, divided by the average of the number of MAUs or monthly active users in the geography at the beginning and end of the quarter.
While ARPU includes all sources of revenue, the number of MAUs used in this calculation only includes users of Facebook and Messenger, according to the company’s financial reports.
For Pinterest, the definition of ARPU is the same as Facebook but the way they measure the MAUs might be different.
For Snap and Twitter, ARPU is defined as quarterly revenue divided by the average DAUs or daily active users.
Therefore, each company seems to have its own definition of ARPU and this makes the comparison rather difficult or even meaningless.
However, in this article, we are still going ahead to do a comparison of the ARPU metrics of Facebook, Pinterest, Twitter and Snapchat.
Keep in mind that the comparison is not a measure to determine which company is better than the other but rather an overview of what their monetization metrics are and how much headroom they may have for improvement with respect to one another.
Let’s take a look!
Social Media Companies ARPU Topics
1. Facebook Vs Pinterest In Worldwide or Global ARPU
2. Snapchat Vs Twitter In Worldwide or Global ARPU
3. Pinterest Vs Facebook In North America ARPU
4. Twitter Vs Snapchat In North America ARPU
5. Europe ARPU
6. Asia Pacific ARPU
7. International ARPU
8. Summary
9. References and Credits
10. Disclosure
Facebook Vs Pinterest In Worldwide or Global Average Revenue Per User
Facebook vs Pinterest in worldwide/global ARPU
Let’s first look at the worldwide or global average revenue per user or ARPU figures for Facebook and Pinterest.
I put the 2 social media companies under the same chart for the reason that their ARPUs definition is the closest and thus, the relevance of the comparison.
At first look, Facebook’s worldwide ARPU was much higher compared to that of Pinterest.
Between fiscal 2017 and fiscal 2022, Facebook’s worldwide ARPU has been on a rise and reached as much as $40 USD as of the end of fiscal 2022.
On the other hand, Pinterest’s global ARPU clocked at only $6.36 USD in fiscal 2022, roughly one-sixth of Facebook’s number.
While Pinterest has a significantly lower ARPU, that is by no means that it is inferior to Facebook.
As Facebook is quite a mature platform in the social media space compared to Pinterest, its monetization channels are expected to be more diverse and well-developed than Pinterest.
Not to mention that Facebook’s user base is multiple times larger than Pinterest’s.
And, that explains the relatively higher ARPU for Facebook.
Despite the much higher ARPU figures, Facebook’s average revenue per user is still on the rise as seen in the chart.
However, Facebook’s ARPU growth rate seems to have reached a plateau in 2022 when ARPU came in slightly lower with respect to that of 2021.
In fiscal 2022, Facebook’s ARPU actually declined by 3% year over year.
Similarly, Pinterest’s average revenue per user, or ARPU also has been increasing and growing much faster over the last 5 years.
In 2022, Pinterest’s ARPU increased by 10% year-on-year, a much more impressive growth rate compared with Facebook.
Snapchat Vs Twitter In Worldwide or Global Average Revenue Per User
Twitter vs Snapchat in worldwide/global ARPU
Similarly, Twitter and Snapchat’s average revenue per user or ARPUs are defined in nearly the same way in which the daily active users metric is used during the measurement.
Therefore, they are put under the same chart for comparison in this discussion.
As seen in the chart, Twitter’s global ARPU has been much higher than that of Snapchat.
In fiscal 2022, Twitter’s worldwide ARPU clocked at nearly $19 USD compared to only $13 USD for Snap Inc.
A trend worth mentioning is Snapchat’s rising ARPU in the last 6 years.
For example, Snap’s average revenue per user has been growing at a compounded annual growth rate (CAGR) of roughly 20% since 2017.
However, Snap’s ARPU took a beating in 2022, down 5% from 2021, marking the 1st time the company reported a decline in ARPU.
As a result, Snapchat has refrained from providing financial guidance for 2023 during the Q4 2022 earnings conference, citing operating challenges and uncertainties.
On the other hand, Twitter’s ARPU has been roughly flat over the last 6 years, averaging around $20 USD of revenue per user.
Facebook Vs Pinterest In North America Average Revenue Per User
Facebook vs Pinterest in North America ARPU
In terms of average revenue per user in North America, Facebook is again beating Pinterest by a large margin as shown in the chart above.
In fiscal 2022, Facebook’s average revenue per user or ARPU in North America came in at a massive $206 USD compared to only $24 USD for Pinterest, a rather large difference between the two platforms.
Therefore, Facebook’s North America ARPU in fiscal 2022 was more than 8X higher than that of Pinterest.
While Facebook’s North America ARPU has been much larger than that of Pinterest, its growth came to a complete stop in 2022 when ARPU was down 3.5% year-on-year, the first decline reported in the last 6 years.
In contrast, Pinterest’s North America ARPU grew 16% in 2022 from 2021, a much better figure compared to that of Facebook.
Twitter Vs Snapchat In North America Average Revenue Per User
Snapchat vs Twitter in North America ARPU
Both Twitter and Snapchat are having a close definition of ARPU and are therefore put in the same chart above for comparison.
According to the chart above, Twitter’s U.S. ARPUs have been much higher than that of Snapchat.
In fiscal 2022, Twitter’s average revenue per user, or ARPU in the U.S. came in at $59 USD, down 9% from fiscal 2021.
On the other hand, Snapchat’s North America ARPU in 2022 was only about half of what Twitter made, at $32.60 USD.
While Snapchat’s ARPU from North America was much lower, it grew 5% year-on-year in fiscal 2022, a much healthy growth rate compared to Twitter.
Also, a trend worth noting is the declining average revenue per user for Twitter’s U.S. region over the years.
Twitter’s U.S. ARPU has only registered a rise since fiscal 2021.
On the contrary, Snapchat’s average revenue per user from North America has been on a tear in the last 6 years, growing at a compounded annual growth rate (CAGR) of around 30% since 2017.
Europe Average Revenue Per User
Europe ARPU
For average revenue per user that comes from Europe, Facebook is again generating the most money per user, at $62.51 USD in fiscal 2022, from its social media platform.
In contrast, Snap’s ARPU from Europe was far lower than that of Facebook in fiscal 2022, reportedly at only $8.12 USD per user, about one-eighth of Facebook’s number.
Pinterest’s Europe ARPU came in at only $3.23 USD as of 2022, the lowest among the 3 social media platforms.
Twitter does not break down its ARPU that comes from Europe.
While Facebook’s Europe ARPU has been the highest compared to Snap and Pinterest, it declined by about 9% in 2022 from 2021.
On the other hand, Snap and Pinterest’s Europe ARPU has been on a rise, growing 3% and 7% respectively in 2022.
While Snapchat and Pinterest’s ARPU from Europe has been far lower than that of Facebook, this should not be seen as inferior but rather as an opportunity to grow their revenue in this region.
After all, Europe is the second most lucrative market after North America for social media platforms like Facebook, Snap, and Pinterest as Europe contributes one of the biggest advertising revenues to these companies.
Asia Pacific Average Revenue Per User
Asia Pacific ARPU
For Asia Pacific average revenue per user, only Facebook breaks down the data in its financial statements.
For other social media companies like Pinterest, Twitter, and Snap, the Asia Pacific ARPU data is lumped together with other countries and is categorized as the international region.
In this aspect, I am assuming that the ARPU figures from the Asia Pacific region have been insignificant for Snap, Twitter, and Pinterest.
That said, Facebook’s ARPU from the Asia Pacific tops $18 USD in fiscal 2022, the highest in the last 6 years, and represents an increase of 4% from a year ago.
Compared to all other regions such as North America and Europe, Facebook’s ARPU figures for the Asia Pacific region are among the lowest.
At less than one-tenth of North America and one-fourth of Europe’s ARPU figures, the Asia Pacific region represents one of the largest but least utilized regions in the world for monetization for not only Facebook but also other social media platforms.
Therefore, Facebook still has plenty of growth ahead for monetization in the Asia Pacific given the size of the population and the relatively low ARPU in this region.
For now, the Asia Pacific region was the least lucrative market for Facebook and possibly for Snapchat, Twitter, and Pinterest as they have yet to publish the data of the Asia Pacific in their earnings releases.
International Average Revenue Per User
International ARPU
The International average revenue per user for all social media platforms shown in the chart above may not be comparable on an apple-to-apple basis due to the inclusion and exclusion of different regions in the data presented by each platform.
Nevertheless, for reference purposes, Facebook still tops the chart at $13.22 USD of ARPU reported in 2022, the highest among all social media platforms despite having Europe and the Asia Pacific regions excluded in the data.
The second-highest ARPU for the International region goes to Twitter, topping $10.17 USD as of 2022.
Snapchat claims the 3rd spot at $3.90 USD of ARPU for the Rest Of World region.
Pinterest was at the bottom for the International region, with an ARPU of only $0.43 for fiscal 2022.
A trend worth noting is the rising International ARPU of Facebook from $12.26 reported in 2021 to $13.22 reported in 2022 which grew about 8% year over year.
The growth is significant for Facebook as this is only the bright spot in 2022 for the company among all regions.
Similarly, Pinterest’s International ARPU also grew quite significantly in 2022, reportedly from $0.29 to $0.43 USD, at nearly 50% year on year.
Conclusion
Of all regions in the world, North America, notably the U.S., remains the most lucrative market to Facebook, Pinterest, Twitter, and Snap as the average revenue per user or ARPU from this region has been the largest in the last 6 years.
Despite the size and the maturity of the online advertising market in North America, all social media companies were still seeing incredible revenue growth in this region.
For example, in fiscal 2022, Sanpchat’s North America ARPU grew 5% while Pinterest’s growth rate topped 13% year-over-year.
After the North American region, the European region was the second most lucrative market for Facebook, Pinterest, and Snapchat as this region contributes the second highest ARPU to these companies.
For example, in fiscal 2022, Snap’s Europe ARPU grew 3% from a year ago to $8.12 USD while Pinterest’s ARPU came in at $3.23 USD, up 7% from a year ago.
On the other hand, Facebook logged the least ARPU in the Asia Pacific, notably at only $18 USD as of fiscal 2022, up only 4% from 2021.
Therefore, Asia Pacific is the least profitable region in terms of ARPU for Facebook.
Despite the size of the population in the Asia Pacific, this region is still under-explored and untapped by most social media companies like Facebook, Snap, Twitter, and Pinterest.
While Facebook has been the largest among the 3 platforms in terms of ARPU figures, it doesn’t mean that smaller players are losing.
Instead, we are seeing significant growth in smaller players like Snap and Pinterest in ARPU numbers in all regions of the world.
References and Credits
1. Financial figures for all companies discussed above were obtained and referenced from their respective financial statements which can be obtained from the following links:
a) Facebook Investor Relations
b) Snap Investor Relations
c) Pinterest Investor Relations
d) Twitter Investor Relations
2. Featured images in this article are used under Creative Common Licenses and obtained from Wall Boat and ijclark.
Disclosure
The content in this article is for informational purposes only and is neither a recommendation nor a piece of financial advice to purchase a stock.
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