Meta appears to be getting back on track with investors. The company has reported its first increase in sales in nearly a year because of improvements in its advertising business. The parent company behind Facebook, Instagram and WhatsApp continues to be frugal with expenses in what its CEO Mark Zuckerberg has called a “year of efficiency”.
The company has shared engagement data around its platforms during its Q1 2023 earnings call. Zuckerberg said that time spent on Instagram has grown more than 24 per cent since the company launched Reels on the platform.
“We’re seeing the sharing flywheel take off with Reels re-shares, with re-shares doubling over the last six months,” Meta CFO Susan Li said.
Now that conversations around the metaverse have cooled while chatter around artificial intelligence has picked up, Meta is trying to cash in on the years of investment it has made. Zuckerberg is attending weekly meetings to focus on the company’s AI strategy. He has told investors that the company’s AI is helping to suggest more relevant photos and videos to people across Instagram and Facebook.
Overall, Meta reported revenue of $28.6 billion, up 3 per cent from a year prior and ahead of expectations of nearly $27.7 billion, according to analysts surveyed by FactSet.
But Meta continues to face competition from the likes of TikTok, which is stealing advertising dollars away from social media companies while Apple continues to keep checks on how apps track users through privacy updates to the iOS software.
Though Reels and AI recommendations are gearing up engagement on Instagram that may not translate into more revenue because it’s eating into time users would have spent on Stories and feed-based content.