Revisiting Facebook’s Emerging Market ARPU

In our earlier analysis, we looked at Facebook’s emerging market average revenue per user (ARPU). We saw that while Asia and rest of world regions showed the highest rate of user base growth, they also showed the lowest ARPU. After two quarters, we can reassess Facebook’s ARPU story, taking a closer look at user growth trends and concurrent ARPU, while also considering the affect of mobile monetization in Facebook’s fastest growing regions.

Facebook continues to see healthy user base growth in its emerging markets. In the past two quarters, Facebook’s user base in Asia and rest of world regions, measured by monthly active users (MAUs), grew by 8.6% and 7.6%, respectively. Facebook saw 298 million MAUs in Asia in the quarter, and 304 million MAUs in rest of world region in the quarter. Combined, these regions represent 57% of Facebook’s overall MAUs. In absolute terms, Asia and rest of world regions continue to outgrow Facebook’s established markets.1

The average revenue per user story for Facebook’s emerging markets over the past two quarters is more positive, showing good revenue growth relative to user base growth in Asia and rest of world. In the third quarter, the company averaged $0.58 per user in Asia and $0.47 per user in rest of world region. In the fourth quarter, Facebook averaged $0.69 per user in Asia, and $0.56 per user in rest of world. Accordingly, the company saw a 5% and 18% increase in ARPU over the third quarter, respectively.

It is still too early to conclude how Facebook’s emerging market ARPU is affected by seasonality. Facebook generated its highest revenue in both regions on an absolute basis in the fourth quarter. Facebook’s revenue in Asia increased from $0.56 per user in the year ago quarter to $0.69 per user. In rest of world, Facebook’s revenue increased from $0.41 per user in the year ago quarter to $0.56 per user. Based on available data, Facebook appears to generate its highest ARPU in the fourth quarter each fiscal year.

It is also not possible to conclude the extent to which Facebook’s regional ARPU increases are the result of mobile monetization. As Facebook’s CFO David Ebersman noted on the fourth quarter earnings call, the mobile advertising product rollout in the emerging regions was most visible in the fourth quarter, implying this as the primary source of the ARPU increase; however, Ebersman was less inclined to draw a causal link between mobile user base growth and ARPU growth.2

Facebook’s emerging market regions should continue grow to the larger share of its overall active user base. Whether these regions also grow to the largest share of revenue is less clear. Total revenue from the developed regions is still larger than in emerging market regions. ARPU in the emerging market regions also remains lower than in the developed regions, and it continues to grow at a slower rate despite its increases in the fourth quarter.

Future ARPU growth in Asia and rest of world regions will depend primarily on Facebook’s mobile monetization efforts. Although the company does not breakdown mobile only users by region, it is likely that a significant segment of these users are mobile only, which means that Facebook will have to accelerate its transition to a mobile company (i.e. develop a more robust mobile revenue growth strategy) if it wants to properly monetize these regions.


  1. Earnings Slides, Facebook Inc., 2013.
  2. Facebook Q4 2012 Earnings (audio), Facebook Inc., 2013.