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I’d love to know the expected ad revenue per user for makers of apps like WhatsApp, Instagram. I’m pretty convinced I’d pay 10x or more than that amount for a

I’d love to know the expected ad revenue per user for makers of apps like WhatsApp, Instagram. I’m pretty convinced I’d pay 10x or more than that amount for a completely ad free version but I can’t be sure.

owebmaster 1y ago
You would not, because 90% of the years wouldn't pay and you wouldn't also to have nobody to talk to after everybody moves to the next chat app
- barnabee 1y ago
  Why would users who can continue to receive exactly the same experience as today leave because some other users can opt to pay to go ad-free?
detaro 1y ago
I'm not sure if the number was for Facebook specifically or all Meta apps, but they did quote a number of around $70 revenue per year per US user a while ago. (with (much) lower numbers in other parts of the world)
- barnabee 1y ago
  That’s interesting, thanks
- disgruntledphd2 1y ago
  These numbers are actually kinda interesting, in that they're based on user location, not advertiser. So basically all global companies target the US first because it's a big market with consistent regulations and mostly one language (compare to the EU where you'd need English/German/French/Spanish/Polish and still would miss a lot). So, those numbers reflect a capital inflow to the US market rather than (as many people think) absurdly high conversion US users. Meta stopped reporting user numbers/CPMs by geography after the market freaked out when user growth plateaued in the US (because they'd acquired basically everyone).
  - detaro 1y ago
    > So, those numbers reflect a capital inflow to the US market rather than (as many people think) absurdly high conversion US users. But the capital inflow is also because there is a lot of consumer spending in the US to convert.
    - disgruntledphd2 1y ago
      Sort of. It's more because of how ML models work. If you have an audience of 100mn then it's much easier to get enough conversions to optimize the models. It's much harder to do it with an audience of 3mn.
      - detaro 1y ago
        By that logic Indonesia and Bangladesh would have higher ad-spend per head than France, because they are larger markets and it doesn't matter how much money people have to spend?
        disgruntledphd2 1y ago
        It's clearly both. But if I have a 1/100000 outcome, I can get maybe 500 conversions in France or the UK, but 3000 in the US. That makes a really large difference in terms of how many times your ad is shown to likely users. But yeah, ML models do in fact work better in Indonesia and Bangladesh, but as you noted they have less money to spend.
xp84 1y ago
Don’t underestimate how expensive ads are and thus how much money they can bring in. Marco Arment, the developer of Overcast podcast player, has made remarks in the past about how the ad-supported version is completely viable and may actually make him more money per user than the price of his paid option. In his case, he runs his own contextual ad system. Obviously Meta is in a completely different league in terms of sophistication, meaning they are probably able to sell more targeted ads which means more money, and they also have the luxury of not having to pay any middlemen since they own their own ad infrastructure as well. Part of me thinks the reason why they don’t offer that paid ad-free version of Facebook (which they built to try and appease the EU regulators) in the US is because their ARPU is so high that people would laugh at the price “Facebook/IG Premium” would have to cost. Also, don’t forget that at least for now, paid subscriptions to social media apps would need to pay a 30% rent to the platform owner duopoly. This means that the price it would be it would cost would need to be 42% above than its ad ARPU just to break even.
- Marsymars 1y ago
  > Part of me thinks the reason why they don’t offer that paid ad-free version of Facebook (which they built to try and appease the EU regulators) in the US is because their ARPU is so high that people would laugh at the price “Facebook/IG Premium” would have to cost. The ad-free one doesn’t have to cost more than the ad-supported ARPU. There’s a pretty reasonable argument to be made that social media services with near-ubiquitous uptake should be regulated as utilities, and regulators could reasonably place the price at cost + a marginal profit margin as determined to be reasonable, like they do for other utilities that are privately-owned. > Also, don’t forget that at least for now, paid subscriptions to social media apps would need to pay a 30% rent to the platform owner duopoly. They don’t have to offer paid subscriptions via IAP.
  - xp84 1y ago
    > doesn’t have to cost more than the ad-supported ARPU I'll state up front that I'm not much of a socialist, so I realize opinions will vary, but it seems crazy to regulate something so frivolous as a social media site to the point of setting its prices. If people don't like Facebook, their ads, or their pricing, simply not using it is not a life-crippling suggestion the way "don't use the Internet" is. So I'd support you on regulating broadband ISPs waaaaay before setting the prices X or FB can charge for meme-related services.
tensor 1y ago
If Instragram had a reasonable paid tier, like $5 a month, I'd do that in a hearbeat. I'd also use instragram 1000x more. Because it's ads only in north america, I use it the minimum I need to for networking purposes.

owebmaster 1y ago

You would not, because 90% of the years wouldn't pay and you wouldn't also to have nobody to talk to after everybody moves to the next chat app

barnabee 1y ago
Why would users who can continue to receive exactly the same experience as today leave because some other users can opt to pay to go ad-free?

detaro 1y ago

I'm not sure if the number was for Facebook specifically or all Meta apps, but they did quote a number of around $70 revenue per year per US user a while ago. (with (much) lower numbers in other parts of the world)

barnabee 1y ago
That’s interesting, thanks
disgruntledphd2 1y ago
These numbers are actually kinda interesting, in that they're based on user location, not advertiser. So basically all global companies target the US first because it's a big market with consistent regulations and mostly one language (compare to the EU where you'd need English/German/French/Spanish/Polish and still would miss a lot). So, those numbers reflect a capital inflow to the US market rather than (as many people think) absurdly high conversion US users. Meta stopped reporting user numbers/CPMs by geography after the market freaked out when user growth plateaued in the US (because they'd acquired basically everyone).
- detaro 1y ago
  > So, those numbers reflect a capital inflow to the US market rather than (as many people think) absurdly high conversion US users. But the capital inflow is also because there is a lot of consumer spending in the US to convert.
  - disgruntledphd2 1y ago
    Sort of. It's more because of how ML models work. If you have an audience of 100mn then it's much easier to get enough conversions to optimize the models. It's much harder to do it with an audience of 3mn.
    - detaro 1y ago
      By that logic Indonesia and Bangladesh would have higher ad-spend per head than France, because they are larger markets and it doesn't matter how much money people have to spend?
      - disgruntledphd2 1y ago
        It's clearly both. But if I have a 1/100000 outcome, I can get maybe 500 conversions in France or the UK, but 3000 in the US. That makes a really large difference in terms of how many times your ad is shown to likely users. But yeah, ML models do in fact work better in Indonesia and Bangladesh, but as you noted they have less money to spend.

xp84 1y ago

Don’t underestimate how expensive ads are and thus how much money they can bring in. Marco Arment, the developer of Overcast podcast player, has made remarks in the past about how the ad-supported version is completely viable and may actually make him more money per user than the price of his paid option. In his case, he runs his own contextual ad system. Obviously Meta is in a completely different league in terms of sophistication, meaning they are probably able to sell more targeted ads which means more money, and they also have the luxury of not having to pay any middlemen since they own their own ad infrastructure as well. Part of me thinks the reason why they don’t offer that paid ad-free version of Facebook (which they built to try and appease the EU regulators) in the US is because their ARPU is so high that people would laugh at the price “Facebook/IG Premium” would have to cost. Also, don’t forget that at least for now, paid subscriptions to social media apps would need to pay a 30% rent to the platform owner duopoly. This means that the price it would be it would cost would need to be 42% above than its ad ARPU just to break even.

Marsymars 1y ago
> Part of me thinks the reason why they don’t offer that paid ad-free version of Facebook (which they built to try and appease the EU regulators) in the US is because their ARPU is so high that people would laugh at the price “Facebook/IG Premium” would have to cost. The ad-free one doesn’t have to cost more than the ad-supported ARPU. There’s a pretty reasonable argument to be made that social media services with near-ubiquitous uptake should be regulated as utilities, and regulators could reasonably place the price at cost + a marginal profit margin as determined to be reasonable, like they do for other utilities that are privately-owned. > Also, don’t forget that at least for now, paid subscriptions to social media apps would need to pay a 30% rent to the platform owner duopoly. They don’t have to offer paid subscriptions via IAP.
- xp84 1y ago
  > doesn’t have to cost more than the ad-supported ARPU I'll state up front that I'm not much of a socialist, so I realize opinions will vary, but it seems crazy to regulate something so frivolous as a social media site to the point of setting its prices. If people don't like Facebook, their ads, or their pricing, simply not using it is not a life-crippling suggestion the way "don't use the Internet" is. So I'd support you on regulating broadband ISPs waaaaay before setting the prices X or FB can charge for meme-related services.

tensor 1y ago

If Instragram had a reasonable paid tier, like $5 a month, I'd do that in a hearbeat. I'd also use instragram 1000x more. Because it's ads only in north america, I use it the minimum I need to for networking purposes.