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Facebook, Pinterest, Twitter And Snapchat’s ARPU Comparison

Social media apps. Flickr Image.

Social media companies 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, for the sake of finding out what it looks like, in this article, we are going to go 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 have for improvement with respect to the other.

Let’s go take a look!

Facebook Vs Pinterest In Wordwide or Global Average Revenue Per User

Facebook vs Pinterest in worldwide/global ARPU

Facebook vs Pinterest in worldwide/global ARPU

* Facebook worldwide APRU includes both advertising and other revenue whereas other companies’ ARPU may come from only advertising revenue.
* Facebook and Pinterest worldwide ARPUs are provided by the respective company and are calculated based on the ratio of geographical revenue to MAUs according to their definitions.
* Pinterest only went public in April 2019 and hence, the ARPU data dated back to only fiscal 2018.
* All companies’s fiscal year begins on Jan 1 and ends on Dec 31.

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 chat for the reason that their ARPUs definition is the closest and thus, the relevance of the comparison.

From the first look, Facebook’s worldwide ARPU seems to be much higher compared to that of Pinterest.

Between fiscal 2016 and fiscal 2020, Facebook’s worldwide ARPU has been on a rise and reached as much as $41 USD as of the end of fiscal 2021.

On the other hand, Pinterest’s global ARPU clocked at only $5.79 USD in fiscal 2021, nearly 8X lower than that of Facebook.

While Pinterest has significantly lower ARPU, that is by no means that it is inferior to Facebook.

As Facebook is quite a mature company 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.

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.

In fiscal 2021, Facebook’s ARPU rose nearly 30% from fiscal 2020.

Similarly, Pinterest’s average revenue per user or ARPU also has been increasing and grew much faster in fiscal 2021, notably at 36% year-on-year.

Snapchat Vs Twitter In Wordwide or Global Average Revenue Per User

Twitter vs Snapchat in worldwide/global ARPU

Twitter vs Snapchat in worldwide/global ARPU

* Snapchat worldwide ARPU is provided by the respective company and is calculated based on the ratio of geographical revenue to DAUs according to their definitions.
* Twitter worldwide ARPU is calculated by the author based on the ratio of worldwide/global advertising revenue to mDAUs (monetizable daily active users).
* Snap only went public in March 2017 and hence, the ARPU data dated back to only fiscal 2017.
* All companies’s fiscal year begins on Jan 1 and ends on Dec 31.

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.

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 2021, Twitter’s worldwide ARPU clocked at nearly $21 USD compared to only $13.64 USD for Snap.

A trend worth mentioning is that Snap’s average revenue per user has been on a rise while that of Twitter has been kind of flat since fiscal 2017.

For example, Snapchat’s ARPU has been more than tripled since fiscal 2017 while Twitter’s ARPU has only grown 13% during the same period.

Facebook Vs Pinterest In North America Average Revenue Per User

Facebook vs Pinterest in North America ARPU

Facebook vs Pinterest in North America ARPU

* Facebook U.S. & Canada APRU includes both advertising and other revenue whereas other companies’ ARPU may come from only advertising revenue.
* Facebook and Pinterest North America ARPUs are provided by the respective company and are calculated based on the ratio of geographical revenue to MAUs according to their definitions.
* All companies’s fiscal year begins on Jan 1 and ends on Dec 31.

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 2021, Facebook’s average revenue per user or ARPU in North America came in at a massive $214 USD compared to $22 USD for Pinterest.

Therefore, Facebook’s North America ARPU in fiscal 2021 was nearly 10X higher than that of Pinterest.

Keep in mind that Pinterest’s North America ARPU comes only from the U.S. whereas Facebook’s North America ARPU comes from both the U.S. and Canada.

What that means is that Pinterest’s monetization channel has only been focused on the U.S. market and for other countries in the American continent, they have yet to be substantial to the company.

Therefore, that is leaving out a lot of headroom for Pinterest to grow in the future.

From the perspective of growth rates, Facebook’s North America ARPU grew 31% in fiscal 2021 from 2020 whereas Pinterest’s North America ARPU grew at a much higher rate of 43%.

Twitter Vs Snapchat In North America Average Revenue Per User

Snapchat vs Twitter in North America ARPU

Snapchat vs Twitter in North America ARPU

* Snapchat North America ARPU is provided by the respective company and is calculated based on the ratio of geographical revenue to MAUs according to their definitions.
* Twitter North America ARPU is calculated by the author based on the ratio of U.S. advertising revenue to mDAUs (monetizable daily active users).
* Snap’s North America also includes Mexico, the Caribbean and Central America.
* All companies’s fiscal year begins on Jan 1 and ends on Dec 31.

Both Twitter and Snapchat are having a close definition of ARPU and are therefore put in the same chart for comparison.

According to the chart above, Twitter’s U.S. ARPUs have been much higher than that of Snapchat.

In fiscal 2021, Twitter’s average revenue per user or ARPU in the U.S. was at a record high of nearly $65 USD, a rise of 38% from fiscal 2020.

On the other hand, Snapchat’s North America ARPU was only about half of what Twitter made in fiscal 2021, at $31 USD.

While Snapchat’s ARPU from North America was much lower, it grew 58% year-on-year in fiscal 2021, a much higher growth rate compared to Twitter.

Also, a trend worth discussing is that Twitter’s U.S. ARPU seems to be on a decline prior to fiscal 2021 and has only registered a rise in fiscal 2021.

On the contrary, Snapchat’s average revenue per user from North America has been on a tear in the last 5 years, growing 38% year-on-year on average.

Europe Average Revenue Per User

Europe ARPU

Europe ARPU

* Facebook Europe APRU includes both advertising and other revenue whereas other companies’ ARPU may come from only advertising revenue.
* Facebook and Snap’s Europe ARPU figures may not be comparable on an apple-to-apple basis due to the different ARPU definition.
* Snap’s Europe also includes Russia and Turkey.
* Pinterest and Twitter does not break down the Europe ARPU numbers.
* All companies’s fiscal year begins on Jan 1 and ends on Dec 31.

For average revenue per user that comes from Europe, Facebook is again generating the most money per user, at $68.90 USD in fiscal 2021, from its social media platform.

In contrast, Snap’s ARPU from Europe was far lower than that of Facebook in fiscal 2021, notably at only $7.89 USD per user, about one-eighth of Facebook’s number.

Pinterest and Twitter do not break down their ARPU that comes from Europe.

I am assuming that this region contributes an insignificant amount of revenue to both companies.

Therefore, Pinterest and Twitter should have plenty of headroom to grow not only in North America but also in Europe given that their monetization strategy has only been focused on the U.S.

Again, both Facebook and Snap have been witnessing massive ARPU growth rates in Europe which has been double-digit since fiscal 2016.

However, Snap’s revenue per user has been growing at a much faster growth rate in Europe, notably at about 46% on average in the last 5 years.

In Europe, Facebook’s ARPU growth rate came in at about 26% on average in the last 5 years, a much lower figure compared to Snap.

Nevertheless, Europe is the second most lucrative market after North America for social media companies like Facebook and Snap because this region contributes one of the biggest revenues per user to these companies.

Asia Pacific Average Revenue Per User

Asia Pacific ARPU

Asia Pacific ARPU

* Facebook Asia Pacific APRU includes both advertising and other revenue.
* Facebook’s fiscal year begins on Jan 1 and ends on Dec 31.

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 out at $17.29 USD in fiscal 2021, the highest in the last 5 years and represents an increase of 26% from a year ago.

Compared to all other regions, Facebook’s ARPU figures for the Asia Pacific region are 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.

Despite almost a trillion in market cap, 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.

International Average Revenue Per User

International ARPU

International ARPU

* International APRU are revenues generated from the rest of the world not reported in prior charts.
* All companies’s fiscal year begins on Jan 1 and ends on Dec 31.

In terms of international revenue per user, Twitter clocked at the highest figures in most fiscal years compared to Pinterest and Snap, and the number came at $11.44 USD in fiscal 2021, a rise of more than 20% from a year ago.

Despite the significant growth in fiscal 2021, Twitter’s international ARPU has remained flat in the last 5 years.

Similarly, Snapchat’s international average revenue per user also has been sort of flat since fiscal 2019 and clocked at $4.10 USD in fiscal 2021, representing a growth rate of only 4% year-over-year but was down 9% from 2019.

In contrast, Pinterest’s international average revenue per user has been rising and reached a record high of $1.59 USD in fiscal 2021, up 80% from 2020.

Of all 3 social media companies, Pinterest’s international revenue per user rose the most and registered the best growth rate between 2017 and 2021 despite having the least ARPU.

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 5 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 2021, Facebook’s North America ARPU grew 30% while Snap’s figure was 58% year-over-year.

Similarly, Twitter’s North America ARPU came in at 38% in 2021 while Pinterest’s growth rate was much higher at 43% year-over-year.

After the North American region, the European region was the second most lucrative market for Facebook, and Snapchat as this region contributes the second highest ARPU to these companies.

For example, in fiscal 2021, Facebook’s Europe ARPU grew 35% from a year ago to $68.90 USD while Snap’s figure came in at $7.89 USD, representing a year-on-year growth rate of 43%.

On the other hand, Facebook logged the least ARPU in the Asia Pacific, notably at only $17.29 USD in fiscal 2021, up 26% from 2020.

Despite the size of the population in the Asia Pacific, this region is still under-explored and untapped for most social media companies like Facebook, Snap, Twitter and Pinterest.

While Facebook has been the largest among the 3 companies 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 in 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.

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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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