Facebook users’ worth approaches that of TV viewers | Social TV | News | Rapid TV News
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Research released by Ampere Analysis has revealed that Facebook is closing the gap on TV advertising, with the social media platform’s ARPU generated by advertising growing six-fold in North America and four-fold in Europe in five years.

facebook 4may2017This compares with the continued flat value of a TV viewer, a situation that has persisted for the last five years. In fact, the analyst calculates that traditional TV advertising has shown growth of less than 7% in both regions over the same half decade.

According to its analysis, Ampere cites Google as being closest to TV on the ARPU measure, estimating that Google currently makes about $7 each quarter for each monthly active user (MAU) from advertising on its sites. For TV, the average viewer is responsible for between $10 worldwide and $11 of advertising revenue per quarter.

By way of contrast, Ampere says that Twitter has been struggling to grow its revenue per MAU, which is stable at about $2; while it regards Snapchat as the big success story of recent quarters.  Although it lags other players in terms of revenue per MAU, Ampere noted that Snapchat been very active in beginning to monetise its customer base more aggressively, increasing revenue from practically $0 per quarter per MAU to $0.70 in less than two years.

Looking at the US, Ampere says that Facebook’s advertising ARPU grew from $3.30 per quarter in 2012 to over $19.80 in 2016. In Europe, it increased from $1.45 in 2012 to $5.86 in 2016. Expressed relative to TV advertising, in the US the value of a Facebook viewer has increased from 7% of the value of an average TV viewer in 2012 to 40% in 2016. The growth has been greater in Europe, with Facebook advertising’s ARPU growing from a 14% proportion in 2012 to 53% in 2016. In Q1 2015, Facebook made $2.3 per MAU while Google made about $5. By the end of 2016, Facebook had more than doubled its number to nearly $5 per MAU in advertising revenue.

Looking at drivers for growth, Ampere noted that one of the fuelling factors was video advertising and the higher cost per thousand (CPT) impressions associated with video commercials.

“As Facebook continues to invest in video and its ARPU increases, it is conceivable that in the not-too-distant future an average Facebook user will be worth more than an average TV viewer in terms of advertising,” remarked Ampere research manager Tony Maroulis. “One advantage the social networking site has is its ability to allow advertisers to keep track of the effectiveness of their online ad campaigns versus traditional TV advertising. Being able to prove campaign performance is vital, of course, because it supports media planning to deliver ROI.”