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Meta Outlines Key Areas of Focus, and Business Opportunity, Following Downbeat Earnings Report

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Meta Implements New Changes to Housing, Employment and Credit Ads to Eliminate Potential Discrimination

After a disastrous earnings report, in which Meta informed the market that its net income was at its lowest levels since 2019 in the most recent quarter, largely due to ongoing, and rising investment in its metaverse vision, Meta has sought to reassure investors that it has a plan to get its financial performance back on track, despite rising challenges in the digital ads space.

In the accompanying earnings call, Meta CEO Mark Zuckerberg outlined the company’s four key areas of focus moving forward.

Those are:

  • Improving its AI discovery tools to maximize engagement in its apps
  • Adding new business messaging features to monetize the user shift towards messaging, and away from social apps
  • Re-building its ad tools to reduce reliance on user data
  • Continued development of AR, VR and the metaverse, with a focus on the future

 

Here’s a look at how Meta is planning to tackle each:

Improving its AI discovery tools

The first point has already proven contentious, with users pushing back against Meta increasingly looking to pump more content from profiles that you don’t follow into news feeds.

This approach, which was guided by TikTok, aims to maximize the value of the content available in each app, by highlighting the best, most engaging posts, regardless of who posted them, to more users. In the past, both apps have pushed users to curate their own streams, based on their interests, but now, Meta’s confident that its AI tools will be able to show you more of what you like in its apps, even if you don’t know that it exists.

And in variance to TikTok, Meta says that it can actually provide a better experience on this front, because it can also apply its AI content matching across a wider range of content types, including photos, text, links, communities, and all kinds of videos.

“We can also mix this content alongside posts from your family and friends, which can’t be generated by AI alone.” 

The assumption here is that users actually want all of these different types of content on a single platform, as opposed to TikTok, where you just get a constant stream of video clips. Whether that’s true or not is unclear, but TikTok continues to engage more users for longer, so it doesn’t seem to be a problem impeding its growth.

Which, in turn, may mean that it’s not a competitive advantage for Meta either.

Either way, the amount of AI-recommended content is only going to increase in Meta’s apps.

Back in July, Zuckerberg noted that:

“Right now, about 15% of content in a person’s Facebook feed and a little more than that of their Instagram feed is recommended by our AI from people, groups, or accounts that you don’t follow. We expect these numbers to more than double by the end of next year.”

Shortly after Zuckerberg said this, Instagram announced that it was scaling back its AI recommendations due to negative feedback, but over time, you can indeed expect Meta to show you more and more stuff, from all different types of users and profiles – whether you’ve chosen to see it or not.

Which is a big shift, especially given Meta’s past insistence that it needs an algorithm to sort through all the posts it could show you, because people simply follow too many people and Pages to show you everything from all of them, every day.

Now, it seems, the opposite is true. Which leads into the second element.

Monetizing the user shift towards messaging

More people are now sharing more content with smaller groups of people in their DMs, as opposed to posting public updates to Facebook or Instagram.

This shift is actually present across all social apps, with a new report published this week also showing that usage among Twitter’s most active users has been in steady decline since the beginning of the pandemic.

The reasons for this are varied. One contention is that, due to the ongoing polarizing impacts of political commentary on social networks, mare users are now increasingly inclined to keep their opinions to themselves, or to share them with a smaller group of trusted friends, rather than broadcasting them for everyone to see, criticize and attack them over.

Meta highlighted this as a key concern among its users last year, with Zuckerberg noting:

“One of the top pieces of feedback we’re hearing from our community right now is that people don’t want politics and fighting to take over their experience on our services.”

There have also been various high-profile cases of celebrities being brought down when their past, offensive tweets have been uncovered, while the shift towards more entertaining content – again driven by TikTok – has also made regular updates feel more stale and less engaging.

The result, then, is that people just aren’t posting as many feed updates as they once did. And with that, Meta’s looking to tap into the resulting growth in messaging as a potential revenue opportunity.

Even though it’s never been able to effectively monetize messaging in the past.

But it, possibly, has a plan:

“As more social interactions move to messaging, we’re developing a flywheel between discovery and messaging that will make all these apps stronger. On Instagram alone, people already reshare Reels nearly 1 billion times daily through DMs.”

Meta’s also working to monetize WhatsApp, with Zuckerberg specifically noting that ‘paid messaging is going to be ‘a big opportunity’ moving forward.

On this front, Meta points to opportunities like:

  • Click-to-Messaging ads, which let businesses run ads on Facebook and Instagram that start a thread on Messenger, WhatsApp or Instagram Direct so they can communicate with customers directly. This is one of our fastest growing ads products, with a $9 billion annual run rate. 
  • Click-to-WhatsApp also just passed a $1.5 billion run rate, growing more than 80% year-over-year.

Whether Meta is able to effectively monetize messaging is a big question, but you can expect it to keep highlighting the potential tapping into the growth of messaging as a means to maximize your marketing and brand-building efforts.

I remain unconvinced that users are super keen to message with businesses, but there may be new ways for Meta to tap into this shift.

Re-building its ad tools to reduce reliance on user data

Meta’s also losing out on ad dollars due to Apple’s iOS 14 privacy updates, which got even worse this week when Apple announced a new App Store tariff on post ‘boosting’ on social platforms.

In response to this, Meta’s looking to improve its AI and machine learning solutions to better automate ad targeting, based on the insights that it can use, as opposed to leaving it up to advertisers to select specific audience subsets which may not be as effective.

This is a tough sell, because for years, Meta has touted its unmatched audience insights as a means to hone in your ad targeting, and reach just the right audiences with your promotions. Now, it’s saying that you should trust its AI black box to display your ads to the right people, even if you have no idea who they are.

Meta’s main solution on this front is its Advantage+ ad suite, which cuts out all of the targeting, and just asks advertisers to set a budget, a date range, and to upload their creative – Meta’s system will do the rest.

Which many will feel uncertain about – but Meta says that its systems are producing results:

Recent testing found that advertisers using Advantage+ shopping campaigns saw a 17% improvement in their Cost Per Acquisition and 32% increase in Return on Ad Spend.”

Meta’s continuing to evolve its tools, and it may well be that its systems do end up producing better response rates than your own targeting would. It puts a lot of trust in Meta’s systems, but if it works…

Eventually, you may not need to do much manual work on your Facebook and IG ads at all, just upload your creative, set a budget, and let the system do the rest.

And then, finally, there’s the metaverse, and the theoretical opportunities of the theoretical VR wondersphere, where anything and everything will be possible.

Eventually.

I have no doubt that the metaverse will become a thing, and that these more immersive experiences will grow into more habitual, transformational trends at some stage. I’m just not sure when that will be. Meta says that it’s a decade out, and it may be even more than that, while various other non-Meta execs say it’s a path to failure, littered with health impacts, dangers, regulatory concerns, etc.

Either way you look at it, the metaverse is not close, with widespread adoption of VR headsets, or potentially AR glasses, being the first big step that needs to happen before you even need to consider what the opportunities might be here.

But Meta remains confident that it will be a thing, and over time, we’ll see what sort of applications and tools emerge in VR that draw people into the experience.

When you see those trends shift, you’ll need to pay attention – but till that happens, it’s largely academic. And if any advisers are telling you that you need a metaverse strategy, I’d probably be assessing how much money they stand to make from such, in variance to the potential value for your business.



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Israeli president tells Musk he has ‘huge role’ in anti-Semitism

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Elon Musk, the world's richest person, said in video remaks that Hamas militants 'have been fed propaganda'

Elon Musk, the world’s richest person, said in video remaks that Hamas militants ‘have been fed propaganda’ – Copyright POOL/AFP Leon Neal

Israel’s president told Elon Musk on Monday that the tech mogul has “a huge role to play” to combat anti-Semitism, which his social media platform is accused of spreading.

The meeting came after the world’s richest person visited a kibbutz community devastated in attacks by Hamas militants on October 7, and met with Prime Minister Benjamin Netanyahu and defence officials.

Musk has been criticised over what critics say is a proliferation of hate speech on X, formerly Twitter, since his takeover of the social media site in October 2022.

He has been accused by the White House of “abhorrent promotion” of anti-Semitism after endorsing a conspiracy theory seen as accusing Jews of trying to weaken white majorities.

Israel’s figurehead President Isaac Herzog told him: “Unfortunately, we are inundated by anti-Semitism, which is Jew hatred.

“You have a huge role to play,” he said. “And I think we need to fight it together because on the platforms which you lead, unfortunately, there’s a harbouring of a lot of… anti-Semitism.”

Musk did not mention anti-Semitism in his video remarks released by Herzog’s office, but said Hamas militants “have been fed propaganda since they were children”.

“It’s remarkable what humans are capable of if they’re fed falsehoods, from when they are children; they will think that the murder of innocent people is a good thing.”

On October 7 Hamas militants broke through Gaza’s militarised border into southern Israel to kill around 1,200 people and seize about 240 hostages, according to Israeli officials, in the worst-ever attack since the nation’s founding.

Vowing to destroy Hamas in response, Israel has carried out a relentless bombardment of targets in Gaza, alongside a ground invasion, that the Hamas government says has killed almost 15,000.

A temporary truce has been in effect since Friday.

– Talk of satellites –

Earlier Monday, Netanyahu and Musk discussed “security aspects of artificial intelligence” with senior defence officials, the Prime Minister’s Office said.

Musk and Netanyahu held a conversation on X following their tour of Kfar Aza, one of the communities attacked by Hamas.

“We have to demilitarise Gaza after the destruction of Hamas,” Netanyahu said, calling for a campaign to “deradicalise” the Palestinian territory.

“Then we also have to rebuild Gaza, and I hope to have our Arab friends help in that context.”

Netanyahu told Musk he hoped to resume United States-mediated normalisation talks with Saudi Arabia after Hamas’s defeat and “expand the circle of peace beyond anything imaginable”.

The war stalled progress towards a Saudi-Israel normalisation deal, and in early November Saudi Arabia’s de facto ruler denounced the conduct of Israeli forces fighting Hamas in Gaza.

Israel’s Communications Minister Shlomo Karhi said his country had reached an understanding in principle on the use of Starlink satellites, operated by Musk’s company SpaceX, in Israel and the Gaza Strip “with the approval of the Israeli Ministry of Communications”.

Starlink is a network of satellites in low Earth orbit that can provide internet to remote locations, or areas that have had normal communications infrastructure disabled.

In September, Netanyahu urged Musk “to stop not only anti-Semitism, or rolling it back as best you can, but any collective hatred” on X.

Musk said at the time that while his platform could not stop all hate speech before it was posted, he was “generally against attacking any group, no matter who it is”.

X Corp is currently suing nonprofit Media Matters on the grounds that it has driven away advertisers by portraying the site as rife with anti-Semitic content.

Musk has also threatened to file suit against the Anti-Defamation League, a Jewish advocacy group, over its claims that problematic and racist speech has soared on the site since he completed his $44-billion takeover.

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Is this X’s (formerly Twitter) final goodbye to big advertisers? It looks like it

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Is this X's (formerly Twitter) final goodbye to big advertisers? It looks like it

It looks like big advertisers are leaving X (formerly Twitter) for good and its owner Elon Musk couldn’t care less.

In the packed DealBook conference in New York on Wednesday, he bluntly told them to shove it. 

This response came after another round of advertisers including IBM, Apple, CNN and Disney bailed on his social network after Musk seemingly supported an antisemitic conspiracy theory last month by responding to an X user’s post — a move he’s since admitted was silly and apologized for. Musk was less remorseful over the uproar caused among advertisers, telling the room: “This advertising boycott is going to kill the company… let’s see how Earth responds to that.”

For many large marketers, this marks the end of a drawn-out farewell (lasting a whopping 13 months) to advertising on X since Musk took over. Surprisingly, even some of X’s own staff members are now calling it quits. Freelance journalist Claire Atkinson reported a “wave of resignations” from CEO Linda Yaccarino’s sales team, including a few of the remaining ad executives who were there before she officially joined in June. Musk’s actions are essentially reversing any recent progress made in reviving X’s advertising business.

Lou Paskalis, CEO and founder of AJL Advisory confirmed that Musk’s comments were indeed another extra nail in the already well sealed coffin because it reaffirmed what most large advertisers already know — Musk resents having to be beholden to them.

“He is trying to position their legitimate brand suitability concerns, largely precipitated by his ongoing antics on X, as a vast, left-wing conspiracy among advertisers to ‘blackmail’ him into constraining his right to free speech,” Paskalis said. “As someone who spent over three decades in the ad buying business, it’s laughable to think that we could all act with that level of coordination, presumably in secret.”

This event highlights how out of touch Musk is with what keeps his company running. He takes an ad boycott as a personal insult when, truthfully, it’s just part and parcel of managing a platform these days. Look at how often YouTube and Meta have dealt with similar issues over the years. The difference? The bigwigs at those companies prioritized protecting their businesses, not their public personas, and were willing to make compromises to win back advertisers. Not that it took much to win back those ad dollars — advertisers rely on those platforms as much as the platforms rely on them.

“It’s just a very sensible decision not to continue advertising on that platform which poses such a strong brand safety risk,” said Ebiquity’s chief strategy officer Ruben Schreurs. “To do all this on stage is unheard of, I’ve never seen anything like it before.”

The largest advertisers seem to agree. Unlike their previous boycotts of advertising on X, this one is permanent for many of them. Some of the most active accounts like Disney, Paramount, Liongsate and Sony Pictures haven’t posted in nearly two weeks. This chimes with what one senior ad exec, who had been in touch with a number of X’s advertisers over the past year, told Digiday last month. Advertisers who had continued to spend on the platform only paid a fraction of what they used to prior to Musk, out of fear of getting called out by Musk if they didn’t.

“It’s easier to pull advertising than it is to return, and what makes the X ad boycott unique is that it isn’t primarily about content adjacency or moderation,” said Jasmine Enberg, principal analyst, social media at Insider Intelligence. “Advertisers are concerned about the reputational damage and the uncertainty of doing business with Musk, and yesterday’s comments will deepen the rift between them.”

An impossible job has now become even more challenging for Yaccarino. Ad dollars weren’t exactly flowing into the social network before Musk’s latest rant. X has averaged a 55% year-over-year revenue decline, according to Guideline. This figure increased to 61% YOY between May and August 2023 — despite Yaccarino joining the company during the summer. 

“The hill she [Yaccarino] must climb to rekindle advertiser demand for the platform just went from steep to vertical,” said Paskalis. “I don’t know how anyone could overcome a direct verbal assault of the magnitude that Musk delivered at the DealBook conference against a customer base already alarmed by his previous rage inducing, divisive and dog whistle laden tweets. None of this will cause Linda to leave, in my opinion, as she sees quitting as failure and failure is not an option in her calculus, no matter what damage may be done to her reputation.”

X did not respond to Digiday’s request for comment.



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YouTube Adds New Analytics Cards, Simplifies its ‘Product Drops’ Feature

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YouTube Adds New Analytics Cards, Simplifies its ‘Product Drops’ Feature

YouTube’s making some updates to its Product Drops feature within live streams, while it’s also adding some new analytics cards, and testing a new format for its TV app.

First off, on Product Drops. YouTube’s changing the requirements for Product Drops in live streams so that more creators will be able to include drops to highlight their items.

Up till now, Product Drops have only been available to creators who’ve connected their Shopify stores, or have access to Google Merchant Center, while creators have also had to plan Product Drops in advance, and schedule them via Live Control Room. But now, YouTube’s giving more creators more ways to access the feature.

As per YouTube:

“Any creators who have connected to their first party stores, or are participating in the YouTube Affiliate Program can set up Product Drops in the live control room on YouTube. This means that more creators will be able to use Product Drops to boost sales and engagement on their live streams.”

YouTube will also now enable creators to implement Product Drops at any time during a live stream, eliminating the pre-planned requirement.

“This will give creators more flexibility to react to the moment, and drive excitement in real time.”

YouTube says that many creators have seen good response to their Product Drops, with the interactive, engaging process helping to drive hype, and spark more response from viewers.

Product Drops are available via the Live Control Room in YouTube Studio. You can read more about how they work here.

YouTube’s also updating its Community Posts creation flow, in order to simplify the process, and ideally get more channels posting text-based updated in the app.

Community Posts remain a lesser element, though YouTube’s been working to make them a bigger focus throughout the year, by adding additional engagement elements like pollsquizzesdisappearing updates, and more.

Simplifying the creation process is another step in boosting awareness, and potentially driving more interaction with you YouTube audience.

YouTube’s also adding some new revenue analytics cards, including “Total Members” insights (which includes subscriber data) and “Where Members Joined From”, which will provide more insight into what’s driving channel growth.

YouTube’s also adding new data on why users have canceled their membership within the insights tab in YouTube Analytics.

YouTube analytics cards

As you can see in this example, the new card will show the reasons why people have opted to stop their subscription to your channel, based on responses provided in the cancellation flow.

Finally, YouTube’s also experimenting with a new format for its TV app, which will make it easier to access different elements.

YouTube TV app

As you can see in this example, shared by 9t05Google, the new format will include bigger buttons to access different elements, and further customize your YouTube experience on the bigger screen.

Connected TV is the fastest growing viewer segment for YouTube, with more and more people now looking to consume YouTube content on their home TV set. As such, it makes sense for YouTube to roll out more updates aligned with big screen viewing in order to feed into this usage.

Some handy updates, across various elements, which are worth noting as you go about managing your YouTube presence.

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