Thanks for all the work on Meta. I have a few questions (please excuse my ignorance on all things digital advertising).
1.) Why is ARPU so much higher in the US and Canada than the other regions?
2.) Why is ARPU continuing to grow despite Apple's rule changes - I would have thought if advertising becomes less potent via FB platforms advertisers would pay less not more?
3.) Should we be concerned that Volume of Ads (impressions) seems to have grown much faster than users - is that degrading the user experience and is limited?
4.) When does an advertiser actually pay Facebook - when somebody clicks or when they display an advert etc?
Any help on these or pointers to the answers would be greatly appreciated. Regards, Mike
1) The biggest reason by far is income. Europe's figures would look closer to the US and Canada if they didn't include the poorer Eastern European countries. Generally speaking, geographies where iPhone has a higher market share relative to Android will be more profitable (happens to be the case where incomes are higher).
2) Depends. I could easily see ARPU going down in the future. But Apple hurt everyone, not just Facebook. In the long run I think relative strength (e.g. Facebook vs. Snap) will end up being more important than it appears right now while everyone is scrambling to figure things out. My bet is FB will figure things out better than anyone else in digital ads (the one exception being Google - who is a total Beast). There are lots of levers to pull. They get to pick and choose ad density across their products. Right now they are de-prioritizing revenue growth / profitability to increase engagement to fight TikTok - so it's quite possible ARPU drops.
3) Meta is quite good at figuring out the right ad balance. This is not something I worry about as someone with a very long term investment horizon.
Thanks for all the work on Meta. I have a few questions (please excuse my ignorance on all things digital advertising).
1.) Why is ARPU so much higher in the US and Canada than the other regions?
2.) Why is ARPU continuing to grow despite Apple's rule changes - I would have thought if advertising becomes less potent via FB platforms advertisers would pay less not more?
3.) Should we be concerned that Volume of Ads (impressions) seems to have grown much faster than users - is that degrading the user experience and is limited?
4.) When does an advertiser actually pay Facebook - when somebody clicks or when they display an advert etc?
Any help on these or pointers to the answers would be greatly appreciated. Regards, Mike
1) The biggest reason by far is income. Europe's figures would look closer to the US and Canada if they didn't include the poorer Eastern European countries. Generally speaking, geographies where iPhone has a higher market share relative to Android will be more profitable (happens to be the case where incomes are higher).
2) Depends. I could easily see ARPU going down in the future. But Apple hurt everyone, not just Facebook. In the long run I think relative strength (e.g. Facebook vs. Snap) will end up being more important than it appears right now while everyone is scrambling to figure things out. My bet is FB will figure things out better than anyone else in digital ads (the one exception being Google - who is a total Beast). There are lots of levers to pull. They get to pick and choose ad density across their products. Right now they are de-prioritizing revenue growth / profitability to increase engagement to fight TikTok - so it's quite possible ARPU drops.
3) Meta is quite good at figuring out the right ad balance. This is not something I worry about as someone with a very long term investment horizon.
4) By click or "Mille" (thousand ad impressions)