Facebook closes the gap on TV advertising

North America and Europe has consistently made up around 80% of Facebook’s advertising revenues. Both markets have experienced a rapid growth over the past five years. The average advertising revenue per Facebook user (ARPU) has grown six-fold in both North American from $3.30 per quarter in 2012 to over $19.80 in 2016, and four-fold Europe, from $1.45 in 2012 to $5.86 in 2016. In contrast, the value of a TV viewer has remained relatively flat, with a growth of less than 7% in both regions over the five-year period. 

One of the factors fuelling this rapid growth is video advertising. In 2014 Facebook announced international launch of auto-play video adverts and began transforming its service into an online video marketing platform for advertisers. Arguably, it has also enabled advertisers to keep track of the effectiveness of their online advertising campaigns much more effectively than traditional TV advertisers. As a proportion, in North America, Facebook’s ARPU has grown from 7% of the value of a TV viewer in 2012 to 40% in 2016. In Europe the growth is greater, with Facebook ARPU growing from a 14% proportion in 2012 to 53% in 2016.

As Facebook continues to invest in video and its ARPUs increase further, it is conceivable that in the near future an average Facebook user will be worth more than an average TV viewer. 

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