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Meta Reports Increasing Costs, Lower Ad Revenue in Q3 Performance Update

Published

2 years ago

October 26, 2022

Meta Reports Increasing Costs, Lower Ad Revenue in Q3 Performance Update

Mark Zuckerberg’s commitment to his metaverse vision is about to face its biggest test, with Meta’s Q3 results showing rising costs, reduced ad income, and slower growth in key markets.

First off, on usage – Facebook is now up to 1.98 billion daily active users, an increase of 16 million on its last report.

But as you can see, the hard sell for Facebook here is that all of that growth is coming from the Asia-Pacific and ‘rest of the World’ markets, which are not as lucrative for the company as the US and Europe.

Facebook has seen solid growth in India and Indonesia, as connectivity and accessibility increases in these regions, but the overall usage counts here don’t contribute as much to the company’s bottom line. They will, hopefully, as these markets mature, and Facebook continues to grow its presence. But as you can see, DAU growth in the US and Europe is dead, which is a concerning sign for the app.

Facebook’s monthly active user counts reflect a similar story, with almost all of the growth coming outside of its top revenue markets.

But then again, Facebook usage is holding firm, people are still logging into the app every day, with the total user count still pushing 3 billion. I would question whether those who are logging in are spending as much time as they used to in the app (something Meta doesn’t report), but the overall figures do underline the significant role that Meta’s tools still play in our broader interactive landscape, as do its Family Active People stats (i.e. users of FB, WhatsApp, IG and Messenger).

Meta’s apps are still hugely popular. But even so, there are some concerning signs.

Those concerns are further exacerbated when examining Meta’s revenue numbers. Meta brought in $27.71 billion for the quarter, which is still a massive result, but it represents a decrease of 4% year-over-year.

That reduced revenue performance is partly due to the impacts of data privacy shifts, partly due to the broader economic downturn – while Meta also notes that:

“Had foreign exchange rates remained constant with the third quarter of 2021, revenue would have been $1.79 billion higher”

In other words, there are various factors at play, it’s not one thing that’s hurting Meta’s revenue numbers. But cumulatively, they are having a big impact, which is not good when Meta’s also continuing to invest in its expensive metaverse vision, which has seen its costs and expenses rise by 19% YoY to $22.05 billion.

What’s even worse here is that Reality Labs, its VR department, and its biggest cost center, is also bringing in less revenue over time, as rising VR headset prices, and reduced interest in the metaverse, have seen it declining in sales and revenue intake.

As you can see here, after peaking in Q4 last year, likely due to people getting Quest headsets for Christmas, Reality Labs revenue has declined significantly, while operating losses for the division continue to ramp up.

And Meta says that’s only going to get worse in the short-term:

“We do anticipate that Reality Labs operating losses in 2023 will grow significantly year-over-year. Beyond 2023, we expect to pace Reality Labs investments such that we can achieve our goal of growing overall company operating income in the long run.”

And this does not look great:

It seems the metaverse push is going to cost a lot more in development before we reach the next stage.

This is arguably the most challenging period in Meta’s history, and indeed, in Zuckerberg’s professional career. The company has lost two-thirds of its value since September last year (and that’s before this earnings result), amid rising skepticism about its metaverse vision, ongoing questions about the negative impacts of its apps, and increasing challenges to its ad business.

On the metaverse, as noted, the company continues to sink cash into its future-looking strategy, which, again, still looks like it’s going to cost a lot more before it’s even close to being a workable, functional, viable alternative for digital connectivity and engagement. Zuck’s view is that, one day, we’ll all be interacting in VR/AR powered spaces, which will enhance the feeling of connection well beyond what current social media apps are capable of doing. And that may be true, but it’ll require widespread take-up of increasingly expensive hardware, and really, a killer app or two that will make its VR and/or AR devices a true must-have

Meta has said that it will take years, perhaps a decade, before we reach the next stage – but can Meta and its investors stomach ten years of pain for the possibility of what could come next?

Which leads to the ad problem. Meta has already said that Apple’s ATT data privacy prompts will cost it around $10 billion this year, and it continues to point to ‘headwinds’ in the ad industry which are impeding the performance of its core ad business. Combine a lack of trust in the company with more consumer choice, then add in a global economic downturn, and the result is that Meta’s ad businesses is not as solid as it once was. It’s still good – the vast majority of Meta’s $27b in revenue this quarter came from ads – but the company really needs to keep growing its ad business in order to keep funding its future projects, which, increasingly, looks to be an impossible balance.

You can also add to this Apple’s latest stab at the company – a 30% tax on boosted posts in social apps announced just this week.

So what does Meta do? It’s too late to go back now, it’s already sunk billions into the metaverse and what it sees as the next phase for the company.

It could scale back that investment, as suggested by Brad Gerstner of Altimeter Capital in a recent open letter, in which Gerstner, as a representative of around 2 million Meta shares, said that:

“We think Meta should cap its metaverse investments to no more than $5B per year with more discrete targets and measures of success, as opposed to today’s much more ambitious and open-ended strategy.”

For context, Meta spent double that on its metaverse projects last year, and will clearly best that again in 2022.

Maybe that would be a way to rationalize investment, and keep its projects on track – but presumably, that would also extend the timeline for its metaverse development. And time is something that Meta might not have.

Because Meta’s apps, while still hugely popular, and still, as noted, seeing overall growth in overall users, are also themselves experiencing a downturn in key areas.

The key consideration here is younger audiences, which Meta has conceded are not using its apps like they once were.

Trends in younger demographics logically ripple through over time, which means that Meta, while it is still a key utility in many respects, is slowly losing ground to other platforms.

It’s not happening rapidly, it’s a steady decline, and it largely relates to time spent in app, as opposed to logging on to check the latest updates then logging off and spending more time elsewhere (which, I would argue, is why Meta’s overall user counts remain high). But it is clearly happening, and while Meta would love to put more time and effort into fixing Instagram and Facebook, and getting its core business back on track, it might not be able to do that, as its replication of every trending app that comes along seems to suggest.

And then there are the concerns around the harm caused by Instagram, how Facebook continues to facilitate the spread of misinformation, how Meta’s plans to encrypt all messages will protect criminals from detection.

When you look at the full scope of Meta’s business, really, it needs to start fresh with the metaverse, and it needs the metaverse to become a thing. Otherwise, it is indeed on a slow and steady descent back to earth.

Again, this is not happening quickly, I’m not saying that Facebook is dead or that Meta will be gone anytime soon, because it absolutely won’t. But Zuck and Co. are logically navigating towards a new future for the company for good reason. And now it’s a race to see whether it can get there, without spending too much, and pissing off too many shareholders, in the process.

All that said, I wouldn’t be counting Meta out too quickly either. Zuckerberg is very likely right, digital interaction in wholly immersive spaces, via avatars, digital goods and more – all of this seems very logical, especially when you look at how youngsters engage in gaming worlds like Fortnite and Roblox. Those are the users Zuck is planning for, not the vocal critics of what the metaverse looks like right now.

And if he gets the timing right, Meta could still be the critical connector in the next phase.

But right now, Zuck and Co. will be feeling the heat, more than ever before.

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12 Proven Methods to Make Money Blogging in 2024

Published

4 months ago

May 14, 2024

Entireweb News Bot

This is a contributed article.

The world of blogging continues to thrive in 2024, offering a compelling avenue for creative minds to share their knowledge, build an audience, and even turn their passion into profit. Whether you’re a seasoned blogger or just starting, there are numerous effective strategies to monetize your blog and achieve financial success. Here, we delve into 12 proven methods to make money blogging in 2024:

1. Embrace Niche Expertise:

Standing out in the vast blogosphere requires focus. Carving a niche allows you to cater to a specific audience with targeted content. This not only builds a loyal following but also positions you as an authority in your chosen field. Whether it’s gardening techniques, travel hacking tips, or the intricacies of cryptocurrency, delve deep into a subject you’re passionate and knowledgeable about. Targeted audiences are more receptive to monetization efforts, making them ideal for success.

2. Content is King (and Queen):

High-quality content remains the cornerstone of any successful blog. In 2024, readers crave informative, engaging, and well-written content that solves their problems, answers their questions, or entertains them. Invest time in crafting valuable blog posts, articles, or videos that resonate with your target audience.

Focus on evergreen content: Create content that remains relevant for a long time, attracting consistent traffic and boosting your earning potential.
Incorporate multimedia: Spice up your content with captivating images, infographics, or even videos to enhance reader engagement and improve SEO.
Maintain consistency: Develop a regular publishing schedule to build anticipation and keep your audience coming back for more.

3. The Power of SEO:

Search Engine Optimization (SEO) ensures your blog ranks high in search engine results for relevant keywords. This increases organic traffic, the lifeblood of any monetization strategy.

Keyword research: Use keyword research tools to identify terms your target audience searches for. Strategically incorporate these keywords into your content naturally.
Technical SEO: Optimize your blog’s loading speed, mobile responsiveness, and overall technical aspects to improve search engine ranking.
Backlink building: Encourage other websites to link back to your content, boosting your blog’s authority in the eyes of search engines.

4. Monetization Magic: Affiliate Marketing

Affiliate marketing allows you to earn commissions by promoting other companies’ products or services. When a reader clicks on your affiliate link and makes a purchase, you get a commission.

Choose relevant affiliates: Promote products or services that align with your niche and resonate with your audience.
Transparency is key: Disclose your affiliate relationships clearly to your readers and build trust.
Integrate strategically: Don’t just bombard readers with links. Weave affiliate promotions naturally into your content, highlighting the value proposition.

5. Display Advertising: A Classic Approach

Display advertising involves placing banner ads, text ads, or other visual elements on your blog. When a reader clicks on an ad, you earn revenue.

Choose reputable ad networks: Partner with established ad networks that offer competitive rates and relevant ads for your audience.
Strategic ad placement: Place ads thoughtfully, avoiding an overwhelming experience for readers.
Track your performance: Monitor ad clicks and conversions to measure the effectiveness of your ad placements and optimize for better results.

6. Offer Premium Content:

Providing exclusive, in-depth content behind a paywall can generate additional income. This could be premium blog posts, ebooks, online courses, or webinars.

Deliver exceptional value: Ensure your premium content offers significant value that justifies the price tag.
Multiple pricing options: Consider offering tiered subscription plans to cater to different audience needs and budgets.
Promote effectively: Highlight the benefits of your premium content and encourage readers to subscribe.

7. Coaching and Consulting:

Leverage your expertise by offering coaching or consulting services related to your niche. Readers who find your content valuable may be interested in personalized guidance.

Position yourself as an expert: Showcase your qualifications, experience, and client testimonials to build trust and establish your credibility.
Offer free consultations: Provide a limited free consultation to potential clients, allowing them to experience your expertise firsthand.
Develop clear packages: Outline different coaching or consulting packages with varying time commitments and pricing structures.

8. The Power of Community: Online Events and Webinars

Host online events or webinars related to your niche. These events offer valuable content while also providing an opportunity to promote other monetization avenues.

Interactive and engaging: Structure your online events to be interactive with polls, Q&A sessions, or live chats. Click here to learn more about image marketing with Q&A sessions and live chats.

9. Embrace the Power of Email Marketing:

Building an email list allows you to foster stronger relationships with your audience and promote your content and offerings directly.

Offer valuable incentives: Encourage readers to subscribe by offering exclusive content, discounts, or early access to new products.
Segmentation is key: Segment your email list based on reader interests to send targeted campaigns that resonate more effectively.
Regular communication: Maintain consistent communication with your subscribers through engaging newsletters or updates.

10. Sell Your Own Products:

Take your expertise to the next level by creating and selling your own products. This could be physical merchandise, digital downloads, or even printables related to your niche.

Identify audience needs: Develop products that address the specific needs and desires of your target audience.
High-quality offerings: Invest in creating high-quality products that offer exceptional value and user experience.
Utilize multiple platforms: Sell your products through your blog, online marketplaces, or even social media platforms.

11. Sponsorships and Brand Collaborations:

Partner with brands or businesses relevant to your niche for sponsored content or collaborations. This can be a lucrative way to leverage your audience and generate income.

Maintain editorial control: While working with sponsors, ensure you retain editorial control to maintain your blog’s authenticity and audience trust.
Disclosures are essential: Clearly disclose sponsored content to readers, upholding transparency and ethical practices.
Align with your niche: Partner with brands that complement your content and resonate with your audience.

12. Freelancing and Paid Writing Opportunities:

Your blog can serve as a springboard for freelance writing opportunities. Showcase your writing skills and expertise through your blog content, attracting potential clients.

Target relevant publications: Identify online publications, websites, or magazines related to your niche and pitch your writing services.
High-quality samples: Include high-quality blog posts from your site as writing samples when pitching to potential clients.
Develop strong writing skills: Continuously hone your writing skills and stay updated on current trends in your niche to deliver exceptional work.

Conclusion:

Building a successful blog that generates income requires dedication, strategic planning, and high-quality content. In today’s digital age, there are numerous opportunities to make money online through blogging. By utilizing a combination of methods such as affiliate marketing, sponsored content, and selling digital products or services, you can leverage your blog’s potential and achieve financial success.

Remember, consistency in posting, engaging with your audience, and staying adaptable to trends are key to thriving in the ever-evolving blogosphere. Embrace new strategies, refine your approaches, and always keep your readers at the forefront of your content creation journey. With dedication and the right approach, your blog has the potential to become a valuable source of income and a platform for sharing your knowledge and passion with the world, making money online while doing what you love.

Image Credit: DepositPhotos

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Snapchat Explores New Messaging Retention Feature: A Game-Changer or Risky Move?

Published

6 months ago

March 18, 2024

Max

Snapchat Explores New Messaging Retention Feature: A Game-Changer or Risky Move?

In a recent announcement, Snapchat revealed a groundbreaking update that challenges its traditional design ethos. The platform is experimenting with an option that allows users to defy the 24-hour auto-delete rule, a feature synonymous with Snapchat’s ephemeral messaging model.

The proposed change aims to introduce a “Never delete” option in messaging retention settings, aligning Snapchat more closely with conventional messaging apps. While this move may blur Snapchat’s distinctive selling point, Snap appears convinced of its necessity.

According to Snap, the decision stems from user feedback and a commitment to innovation based on user needs. The company aims to provide greater flexibility and control over conversations, catering to the preferences of its community.

Currently undergoing trials in select markets, the new feature empowers users to adjust retention settings on a conversation-by-conversation basis. Flexibility remains paramount, with participants able to modify settings within chats and receive in-chat notifications to ensure transparency.

Snapchat underscores that the default auto-delete feature will persist, reinforcing its design philosophy centered on ephemerality. However, with the app gaining traction as a primary messaging platform, the option offers users a means to preserve longer chat histories.

The update marks a pivotal moment for Snapchat, renowned for its disappearing message premise, especially popular among younger demographics. Retaining this focus has been pivotal to Snapchat’s identity, but the shift suggests a broader strategy aimed at diversifying its user base.

This strategy may appeal particularly to older demographics, potentially extending Snapchat’s relevance as users age. By emulating features of conventional messaging platforms, Snapchat seeks to enhance its appeal and broaden its reach.

Yet, the introduction of message retention poses questions about Snapchat’s uniqueness. While addressing user demands, the risk of diluting Snapchat’s distinctiveness looms large.

As Snapchat ventures into uncharted territory, the outcome of this experiment remains uncertain. Will message retention propel Snapchat to new heights, or will it compromise the platform’s uniqueness?

Only time will tell.

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Catering to specific audience boosts your business, says accountant turned coach

Published

7 months ago

February 26, 2024

Entireweb News Bot

Catering to specific audience boosts your business, says accountant turned coach

While it is tempting to try to appeal to a broad audience, the founder of alcohol-free coaching service Just the Tonic, Sandra Parker, believes the best thing you can do for your business is focus on your niche. Here’s how she did just that.

When running a business, reaching out to as many clients as possible can be tempting. But it also risks making your marketing “too generic,” warns Sandra Parker, the founder of Just The Tonic Coaching.

“From the very start of my business, I knew exactly who I could help and who I couldn’t,” Parker told My Biggest Lessons.

Parker struggled with alcohol dependence as a young professional. Today, her business targets high-achieving individuals who face challenges similar to those she had early in her career.

“I understand their frustrations, I understand their fears, and I understand their coping mechanisms and the stories they’re telling themselves,” Parker said. “Because of that, I’m able to market very effectively, to speak in a language that they understand, and am able to reach them.”Â

“I believe that it’s really important that you know exactly who your customer or your client is, and you target them, and you resist the temptation to make your marketing too generic to try and reach everyone,” she explained.

“If you speak specifically to your target clients, you will reach them, and I believe that’s the way that you’re going to be more successful.

Watch the video for more of Sandra Parker’s biggest lessons.

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