Facebook’s (FB) worldwide ARPU (average revenue per user) rose to $6.18 in 4Q17 compared to $5.07 in 3Q17 and $4.83 in 4Q16. The changes in ARPU indicate that the metric improved nearly 28% YoY (year-over-year). Its worldwide ARPU increased 26.4% YoY in 3Q17.
Facebook, Snap, Twitter, and Alphabet’s (GOOGL) Google have something in common: they all depend on digital advertising budgets for most of their revenues.
Facebook’s North American daily audience declined
Facebook generates most of its advertising revenues from the United States and Canada. The company’s daily users in those countries declined 1.0 million in 4Q17, while their monthly audience was flat. Despite the decline in daily audience and lack of growth in monthly audience, Facebook’s ARPU in the United States and Canada still grew more than 35% to $26.76 in 4Q17.
Ad price rose 43%
So how did Facebook’s ARPU increase in 4Q17 with a decline in audience, indicated by a fall in usage time by 50 million hours per day? According to the company, that can be explained by seeing how Facebook’s advertising has continued to improve. The company said its average price per ad increased 43% YoY in 4Q17 compared to 35% YoY in 3Q17.