Meta increases monetization efficiency

Increased ad inventory and improved marketing performance have been key to Meta’s return to growth in 2023, as the social media giant’s valuation once again crossed the £1 trillion mark. 

On an earnings call, CFO Susan Li highlighted two primary factors driving Meta’s revenue performance: “Our ability to deliver engaging experiences for our community and our effectiveness at monetizing that engagement over time.” And AI is a crucial element of both of those. 

Monetization 

• Meta is “growing the level of ad inventory within organic engagement” and optimizing ad levels in its apps, explained Li.
• By leveraging AI across its ad systems and product suite, it is “delivering continued performance gains from ranking improvements,” she said. An example is the Advantage+ portfolio of solutions that help advertisers use AI to automate their advertising campaigns. 
• Investment in conversion APIs is making it easier for advertisers to connect marketing data and measure results. “We get very positive feedback from advertisers who use those tools,” said Li.
• Click-to-message ads and paid messaging are growing areas.

Experiences

• Engagement trends are strong: in Q4, daily watch time across all video types grew 25% year-over-year.
• Content recommendations driven by AI are helping drive incremental engagement.
• Threads and Gen AI are expected to grow engagement further in the future. 

Key figures 

• Ad revenue in 2023 was up 16% to $131,948m.
• Ad impressions were up 28% over the year, with the average price per ad down 9%.
• Meta had 3.19 billion daily active people across all apps in December 2023, up 8% year-on-year.

Sourced from Meta, Seeking Alpha