Google makes $256 off your personal data and Amazon makes even more.
You are worth a lot of money to big tech companies. Your personal data determines the ads you see, and it helps bring in billions of dollars to digital advertising—advertising that is significantly more valuable when the right person is watching.
Average Revenue Per User (ARPU) measures how much a user is worth to a company. This is calculated by dividing revenue by the number of users. So, hypothetically, if a company makes $100k and has 1000 users, each user is worth $100. This revenue would be coming from the advertisements each of these users sees based on their data, which is what is making them worth that $100 to the tech company. You could be that $100, or even more, based on the CPMs that make you valuable!
An average US Google user is worth $256 based on the ARPU measurement, meaning the tech giant makes $256 off your data through advertising. And Amazon tops the charts with ARPU at $752! Amazon, in particular, relies on people’s purchasing power to facilitate their ad revenue. Their 310M users compared to Google’s 2B explains why each user is worth more, especially with the revenue of Amazon’s shopping platform.
Facebook is making more per user than Netflix, which is intuitive because Netflix runs on a subscription model and Facebook is ad-supported. Netflix does not run ads on its platform while also spending billions on original content, whereas Facebook spends next to nothing in comparison.
There are certainly differences across social media channels as well. The average Snap user is worth only $1.91, much lower than Facebook’s $158 ARPU. This reflects the difference between Snap’s less-developed ad product and Facebook’s well-developed platform with a wider reach.
Mobile game users are on average worth $52.38 per user. This value could vary based on the type of game and how many ads the user is watching and for how long. Those with users who stay for only short amounts of time, may only watch one or two ads and be worth below average. For those apps that can keep users for long periods of time, the user will be worth much more. Apps that use value exchange ads (where people opt-in to unlock content, points, or digital entertainment) doubly benefit because they don’t interrupt their users and still receive high payouts from major brands.
Ad revenue is impossible without eyeballs. People, therefore, have more power than they realize. As consumers and governments become aware of how tech companies leverage our personal information, privacy is coming to the forefront. It will be interesting to see how it plays out. Every click, every glance by a consumer determines who is winning the arms race that is adtech.