Meta’s Attempts at Revenue Reconciliation

In the second quarter, Meta posted its first-ever YoY revenue decline with the average price per ad on the platform decreasing 14%. Early forecasts for Meta’s worldwide ad revenue was around $130 billion for 2022, but as we near year-end, that prediction is looking very unlikely. In response to disappointing Q2 and Q3 results, Meta is rolling out a slew of new ad formats in an attempt at rightsizing their trajectory. The hope is that these new features will provide a much-needed revenue injection as Meta struggles to compete with others in the media space. 

Meta’s largest push surrounds how it monetizes its TikTok-like product, Reels. They’ve included post-loop, short-video ads that run between Reels videos. In addition, a carousel of ads can be embedded at the bottom of a creator’s Reels. The idea is to provide a monetization plan for its influencers to produce Reels that generate views. Those views turn into advertising opportunities that can be seen by millions. While this format is new to Meta, it has been pivotal in producing ad space within the social media market for other platforms. 

Machine Learning
Another strategy Meta is utilizing, for Messenger, is identifying whether a consumer is new to a product or not. The A.I. can identify whether the ads are targeting new or repeat customers. It targets these consumer’s preferences and adjusts the ad selection to something they may be interested in. Adjusting to preferences allows the A.I. system to directly target a consumer’s likes and needs for possible increased purchasing opportunities. The A.I. will even link consumers to businesses that have direct chats, helping boost engagement.

The latest additions to Instagram give advertisers several options for reaching users. 

  • Display ads added to the Explore page, which is personalized to the user’s preferences
  • Influencers can put display ads on their profile pages 
  • Augmented reality ads tested within Instagram’s main feed and stories feature
  • Multi-advertiser ads show a carousel of related promotions to accompany the original ad (including a competitor, such as two supermarket ads in the same carousel)

Following in TikTok’s footsteps, Instagram launched a music optimization feature that allows marketers to pair their Reels ads with select songs from the Meta Sound Collection Library for free. Advertisers can choose their own songs from this library, or Instagram can automatically pick a song that pairs well with the content of the Reels ad.

With these changes, Meta has attempted to balance the user experience and advertising. These updates are a conscious effort to increase the number of ad opportunities available to marketers, while lowering prices and reducing barriers to entry.

At Brkthru, we are in tune with the latest platform changes and how they can generate results for your business. We tailor to your needs and make $1 work like $10.