State of Social Media 3Q 2017: Facebook Nears $5 ARPU

State of Social

Facebook, the largest social network and arguably the largest product ever made for the human race intentionally, released its 3Q 2017 earnings. Let’s see what the behemoth had to say.

User Growth

After passing 2 billion monthly active users last quarter, Facebook notched another 72 million or so new monthly active users for 3.29% growth.

Surprisingly, some of that growth came from North America, traditionally a fairly stable market for the giant:

Mobile Users

Facebook stopped publishing its mobile-only user data; we use predictive analytics to estimate the percentage of their mobile and mobile-only users based on the last 7 years of data and their current overall user base.

Facebook’s cessation of reporting mobile-specific users in 1Q 2017 may have been simply because the statistic is meaningless. We estimate that 96% of Facebook’s users use the core platform at least some of the time on a mobile device:

We see that 1.4 billion people use Facebook solely on a mobile device, making it one of the largest mobile platforms besides the mobile operating systems themselves:

Bear in mind, these are core platform numbers. They do not include Messenger, WhatsApp, Instagram, tbh, or other acquisitions.

As we’ve stated in the past, a Facebook strategy is a mobile strategy and vice-versa. There’s no point in attempting to disambiguate the two; they are virtually synonymous from the user’s perspective.

Ad Revenue

Facebook showed a strong third quarter, powered by North American ad revenues:

Quarter-over-quarter, Facebook showed a 10.67% Q3 improvement in revenue, a solid showing compared to the same quarter in 2016:

This brings Facebook close to an almost-unheard of number in social media marketing: $5 average revenue per user. No social network has ever achieved that much revenue per user at scale.

What Do These Results Mean?

Facebook continues to pick up momentum, no small feat for a massive juggernaut. Entering Q4, Facebook will press hard on advertisers to close out the year with the same or better results as last year’s record-setting Q4. How might they do this?

Recent news suggests Facebook may be experimenting with banishing all Brand Pages’ content to its new Explore Feed, outside of the regular News Feed. This extra step would virtually guarantee that unpaid social media posts by brands and companies on Facebook would never be seen, forcing companies to advertise just to be seen.

What Else is Coming From Facebook?

Facebook CEO Mark Zuckerberg remarked,

We’re doing a lot here with investments both in people and technology. Some of this is focused on finding bad actors and bad behavior. Some is focused on removing false news, hate speech, bullying, and other problematic content that we don’t want in our community. We already have about 10,000 people working on safety and security, and we’re planning to double that to 20,000 in the next year to better enforce our Community Standards and review ads. In many places, we’re doubling or more our engineering efforts focused on security. And we’re also building new AI to detect bad content and bad actors – just like we’ve done with terrorist propaganda.

Doubling its security and increasing its investment in content detection AI means that Facebook will be less and less tolerant of grey hat marketing and advertising techniques. While such security will be principally designed to prevent things such as election interference, it’s a very small leap to detecting groups of influencers (“pods”) subverting the core algorithms Facebook designs to force brands to pay up. That’s a very easy task to train an AI on once the architecture exists to detect more complex hacks.

If Facebook influencers are a core part of your marketing and communications strategy, be prepared for a potential decline in their influence and/or increased cost to make their content more visible to your audience.

As the largest product ever intentionally rolled out to the human race, Facebook is a greater force than ever in marketing. If you haven’t budgeted significant dollars towards marketing on Facebook, you’re missing out on literally billions of people.

Christopher S. Penn
Vice President, Marketing Technology

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Posted on November 2, 2017 in Advertising, Facebook, Marketing, Media, Public Relations, Social Media

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About the Author

Christopher S. Penn is an authority on digital marketing and marketing technology. A recognized thought leader, author, and speaker, he has shaped three key fields in the marketing industry: Google Analytics adoption, data-driven marketing and PR, and email marketing. Known for his high-octane, here’s how to get it done approach, his expertise benefits companies such as Citrix Systems, McDonald’s, GoDaddy, McKesson, and many others. His latest work, Leading Innovation, teaches organizations how to implement and scale innovative practices to direct change.

Christopher is a highly-sought keynote speaker thanks to his energetic, informative talks. In 2015, he delivered insightful, innovative talks on all aspects of marketing and analytics at over 30 events to critical acclaim.

He is a founding member of IBM’s Watson Analytics Predictioneers, co-founder of the groundbreaking PodCamp Conference, and co-host of the Marketing Over Coffee marketing podcast.

Christopher is a Google Analytics Certified Professional and a Google AdWords Certified Professional. He is the author of over two dozen marketing books including bestsellers such as Marketing White Belt: Basics for the Digital Marketer, Marketing Red Belt: Connecting With Your Creative Mind, and Marketing Blue Belt: From Data Zero to Marketing Hero.

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