Social media is essential for any business that wants to amplify its content. Today, 4.76 billion people (60 percent of the world’s population) use social media. Social media counts for half the Top 10 most popular sites in the world. Meta accounts for two of those sites, Instagram and Facebook – the latter of which is the second most popular site in the world.
Yes, the often-criticized Meta, which suffered from a brutal year of financial setbacks and a decline in users in 2022, remains a force to be reckoned with. In fact, Meta appears to have shaken off many of the problems that plagued the company in 2022, finding itself starting 2023 with a bang. In its most recent quarterly earnings, Meta exceeded analysts’ expectations for revenue and daily active users. Its global daily active user count, 2 billion, is bigger than the population of China. Although stock value is by no means the only measure of a company’s success, it’s worth noting that Meta’s market capitalization has rebounded dramatically.
What is Meta doing right? Here are two reasons for the company’s recent turnaround:
In February 2022, we blogged about the company’s stock price suffering the single-biggest loss for any company in the history of Wall Street. This happened because Meta announced a first-time-ever global drop in its average monthly users and a charge of $10 billion to adjust to new privacy controls enacted by Apple in 2021. Those controls allowed people to opt out of ads that track their behavior across the web. Well, Meta’s ad business is built on this kind of behavioral tracking.
Now, for the good news: according to the Wall Street Journal, Meta has figured out how to develop ad products that rely on data it collects from its own users (known as first-party data). Meta’s broad targeting ad program consists of an automated targeting approach that reportedly produces better results for Facebook and Instagram ads than more refined, more niche audience approaches do. Meta is also developing ads where users click straight into a messaging conversation with a business.
Meta introduced Reels – short snippets of video content – to respond to the massive popularity of TikTok’s own short-form video format. It’s taken some time, but Reels are beginning to take hold on Facebook and Instagram. The Wall Street Journal shared an internal memo from the executive team that noted, “Our internal data indicates that Meta has grown to a meaningful share of short-form video.”
That’s huge! Why are Reels catching on? Because Meta is using artificial intelligence (AI) to suggest more relevant Reels to users, similar to how Spotify suggests songs to its subscribers. Per The Wall Street Journal:
AI tools have also helped boost Reels, the full-screen, short-form videos shown to Facebook and Instagram users based on their interests. The videos typically come from people that users aren’t friends with or connected to in any way. Last summer, Meta was still struggling to get users to embrace Reels videos, but the documents and interviews show that on Facebook, which remains by far Meta’s biggest moneymaker, viewership has picked up.
Meta CFO Susan Li said on the recent earnings call, “We are still roughly on track to bring the overall Reels revenue headwind to a neutral place by the end of this year or early next year, and we're planning to do that through both improving Reels monetization efficiency and growing incremental engagement from Reels.”
In other words, Reels is finally making money for Meta. The company still has many challenges to overcome, including an expensive investment into the metaverse that has yet to deliver financial returns. But it’s clear that Meta is back.
If you already have a presence on Meta, now is the time to double down on the content you share there. Instagram remains especially popular with Gen Z and Millennials. Facebook continues to maintain its dominance as the preferred platform for older generations.
Are you using Reels? You should be! If you’re successfully using TikTok, you're in luck. Reels will feel like a natural fit by being well-versed in creating short-form content. (Our post about creating short-form video content should help.)
Consider also Meta’s ad products based on first-party data. Meta has been investing heavily in AI tools to improve its ad-targeting systems and, as noted, making better recommendations for Reels users, its short-video feature.
As with most social media platforms, success means developing a Connected Content strategy that encompasses paid and organic content. Contact Investis Digital to maximize your results. We have deep experience helping businesses build trust with audiences on social media. Read more about our work here.