Arrow points along with air flow. So it'll point at the intake manifold. Looks like in your e36 it'd end up toward the firewall. I have an e30, so I can't take a pic for you.
Glad you're new to Bimmers. We need some more fans. Seriously, they're just like every other car, 'cept they're more fun & last far longer. I just flipped 271K miles.