State of Social Q4 2017: Facebook Smashes Ad Revenue Records, $6 ARPU

State of Social Facebook

Facebook, the largest social network and the largest product ever made for the human race intentionally, released its 4Q 2017 earnings report. Let’s see what the social media juggernaut had to say.

User Growth

After passing 2 billion monthly active users last year, Facebook added another 2.75% growth to its user base, taking it to 2.129 billion people:

In contrast to last quarter, this year the EU region was the only region with upward growth, and North America flatlined:

We see this essentially as Facebook having completely saturated most of the markets it’s in; their ability to gain new users is dependent on growing new Internet users as well.

Mobile Users

Facebook stopped publishing its mobile-only user data in early 2017; we use multivariate logistic regression to estimate the percentage of their mobile and mobile-only users based on the previous 7 years of data and their current overall user base.

97% of Facebook’s user base uses a mobile device to access the service at least part of the time:

We see that 1.5 billion people use Facebook solely on a mobile device, making it the largest mobile platform for marketers and communicators to reach mobile users:

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. Facebook is mobile, and for many users, a primary mobile experience.

Ad Revenue

Facebook crushed expectations in its fourth quarter revenue, always its strongest quarter:

Quarter-over-quarter, Facebook showed a 26% increase in revenue, comparable to their 2016 Q4:

This brings Facebook to a new high water mark in advertising revenue, an astonishing number: $6 average revenue per user.

No other major social networking platform has ever hit even close to $6/ARPU. This is an amazing accomplishment and speaks to the effectiveness of Facebook’s advertising revenue strategy.

What Do These Results Mean?

Facebook continues to defy expectations and prove that it’s the king of the Internet right now. At $6/ARPU and 2.129 billion users, it’s the largest product ever made for humanity. In turn, this means that Facebook continues to have outsized influence on everything marketers and communicators do.

To put it in perspective, a business needs to have a website as a form of digital presence in 2018, and has for a number of years. Today, a business needs to have a robust paid Facebook advertising program as well in 2018.

What Else is Coming From Facebook?

Facebook recently announced a series of changes on its platform, from deprecating the Instagram API to changing the algorithm for the News Feed to reduce passive consumption.

CEO Mark Zuckerberg remarked:

So I want to be clear: the most important driver of our business has never been time spent by itself. It’s the quality of the conversations and connections. And that’s why I believe this focus on meaningful social interactions is the right one.

The net effect for businesses, marketers, and communicators is this:

If your Facebook strategy relies on passive, unpaid content, Facebook is no longer worth your time.

Facebook is only worth your time if you do one or both of the following:

  • Pay to have updates and content shown
  • Create content that evokes strong conversation and user participation

This is the new Facebook strategy for now, for the early part of 2018. Creating anything other than paid, engaging content is a waste of time and resources. No one will see it, and it will drive no business results.

Christopher S. Penn
Vice President, Marketing Technology

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Posted on February 1, 2018 in Analytics, Facebook, Marketing, Public Relations, Social Media

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