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Meta Reports Slowdown in User Growth and Revenue Amid Shifting Economic Conditions

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NFTs are Coming to Facebook and Instagram – Whether You Like Them or Not

Tough times at Meta, with the company reporting a decline in monthly active Facebook users, and a further slowdown in revenue, as global economic trends continue to impact the company’s overall performance.

First off, on usage – Facebook is currently seeing 1.97 billion daily active users, a slight increase on last quarter.

The increases were almost entirely driven by the Asia Pacific market, with Facebook continuing to grow in India and Indonesia specifically. Though Facebook usage has continued to decline in Europe, this time in a significant way.

Part of that would obviously be attributed to Russia, where Facebook is facing restrictions due to Government censorship around the invasion of Ukraine. Facebook has 70 million Russian users, and with this in mind, it’s probably surprising that the decrease hasn’t been more significant in this region.

But then again, Facebook’s monthly active user counts look even worse.

Meta Q2 2022

As you can see, Facebook lost two million MAU overall in the period, with, again, European losses being the most significant.

The Russian invasion likely explains much of this, so it may not be as big a deal as it seems, while Facebook has continued to see growth in every other market, if slight in some.

As such, it’s difficult to say what the figures mean, in a broader growth context, given the surrounding environment, and impacts around the world.

Meta has also provided its ‘family of apps’ usage, which incorporates Facebook, WhatsApp, Messenger and Instagram.

Meta Q2 2022

As you can see here, overall, Meta’s still growing, up just slightly on the last period.

Again, the broader impacts of Russia’s war on Ukraine are a big factor, so it’s hard to take anything definitive from this. But the conflict also doesn’t appear to be easing, and that will continue to have various market impacts – aside from the horrendous human toll – moving forward.

In terms of revenue, Meta brought in $28.82 billion for the quarter, versus market expectations of $28.94 billion.

Meta Q2 2022

Again, Europe is where Meta is seeing the biggest impact – which makes perfect sense, of course, but is still a challenge for Meta to deal with.

Meta attributes the slowdown to weaker advertising demand driven by ‘broader macroeconomic uncertainty’, while it’s also seen lower sales of its VR headsets, impacted by production delays, rising costs, etc.

Meta Q2 2022

Just this week, Meta announced an increase in the price of its flagship Quest 2 VR headset, which is a big deal considering that Meta needs to get more headsets into more homes to realize its metaverse vision. We’re also heading into the holiday season, when it’s most likely to see a sales jump. That could make it a particularly impactful change, which could have knock-on effects for the company’s broader plans for the next stage.

Though it’s probably this chart that will be the most discussed from Meta’s latest results:

Meta Q2 2022

Meta’s overall income – i.e. the money that it’s taking in after costs – is at the lowest level it’s been for two years.

That provides more context as to why the company is now embarking on cost-cutting measures, and why CEO Mark Zuckerberg recently told staff that many of them ‘shouldn’t be here’.

Meta’s staff headcount jumped from 59k in 2020, to 72k a year later, as part of its increasing push into the metaverse, and expanding its global footprint. That drive, given the shifting economic landscape, has proven ultimately too aggressive, and has since seen Meta abandon projects like its own smartwatch, consumer Portal devices and social audio projects, while also slashing investment in original content and its Bulletin newsletter offering.    

It seems like Meta is too big to fail, but the chart above provides true scope as to how much its metaverse investment is costing – which could ultimately pay-off, if Meta becomes the engagement platform of the next generation, for a broad range of options. But the risk is also clear, and Meta will need to tread more carefully moving forward.

Which could be difficult, with Zuckerberg also committed to ‘going for it’ in regards to the metaverse shift, and guiding the future of digital interaction. This week, Zuckerberg told staff that Meta is in a ‘philosophical competition’ with Apple to build the metaverse, with the two tech giants on course to clash over what comes next.

As Zuckerberg explained:

“This is a competition of philosophies and ideas, where they believe that by doing everything themselves and tightly integrating that they build a better consumer experience, and we believe that there is a lot to be done in specialization across different companies, and [that] will allow a much larger ecosystem to exist.”

In order to come out on top, Meta will need to keep pumping money in, while its ad revenue likely continues to decline, at least in the immediate term.

It’s a difficult sell for the company, which now needs to face up to shareholders and explain the grand vision once again.

The message will be that this is the right path, that it has to stay the course – that it can’t allow another company to push in and own the metaverse space.

How that’s received could have a big impact on the platform’s continual expansion, which will also influence ad display, user experience, and opportunities.

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YouTube Will Now Enable Brands to Buy Specific Time Slots Around Major Events for Masthead Ads

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YouTube Will Now Enable Brands to Buy Specific Time Slots Around Major Events for Masthead Ads

YouTube has added a new time targeting element to its Masthead Ads, which will enable brands to display their promotions in key times leading up to key events.

As explained by YouTube:

In a time of multiple screens and countless ways to stay entertained, it can be challenging to get your audience’s attention. But even with so much content available at any time, people are drawn to moments they can experience together: a new movie release, a big game, a product launch, a holiday. And these are key opportunities to connect with a brand. Marketers, you know this well: you center advertising campaigns around the tentpole moments most likely to inspire your audience, shift perceptions or influence a purchase decision.”

YouTube’s Cost-Per-Hour Masthead enables brands to own the most prominent placement in the app during the hour(s) leading up to, during or after priority moments.

For example:

“[During the recent World Cup], McDonald’s Brazil turned to the YouTube Cost-Per-Hour Masthead. Their strategy was savvy: reach anyone in Brazil who was watching YouTube an hour before the Brazil vs. Cameroon match and remind them to pick up McDonald’s before the game started. This perfectly timed execution delivered tens of millions of impressions at the very moment fans were preparing for the match.

It could be a good way to hook into key moments, and build momentum for your campaigns, while also establishing association with key events and subjects.

“Just a few weeks ago, Xiaomi, the leading smartphone manufacturer in India, prepared to launch their highly anticipated Redmi Note 12 series via YouTube livestream. To drive viewership, Xiaomi ran the Cost-Per-Hour Masthead during the event. Not only did this activation drive scaled awareness, it led to over 90,000 concurrent livestream views. The Redmi Note 12 went on to generate a record number of first-week sales, making it one of their most successful launches to date.

It’s an expansive, but potentially significant targeting option, which could hold appeal for big brands looking to make a big splash around major events and releases.

You can learn more about YouTube’s Cost-Per-Hour Masthead process here.

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'Astonishing' New Cognitive Research Shows Gaining Knowledge, Learning New Skills, and Achieving Mastery Comes Down to the Rule of 7

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'Astonishing' New Cognitive Research Shows Gaining Knowledge, Learning New Skills, and Achieving Mastery Comes Down to the Rule of 7

While talent matters, the good news is we all learn at basically the same rate–and can “learn anything we want.” Think you don’t have the talent for entrepreneurship? For leadership? For programming, for design… for whatever pursuit you may want to, um, pursue? According to HubSpot co-founder …

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How to Successfully Use Social Media: A Small Business Guide for Beginners [Infographic]

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How to Successfully Use Social Media: A Small Business Guide for Beginners [Infographic]

Are you a small business owner or marketing manager, just getting started on building your social media strategy? Need to learn the basics before launching your first social media campaign?

In this infographic, Sprout Social shares social media tips broken down as follows:

  • Who uses social media?
  • What does social media do for you?
  • Define your goals
  • Targeting your audience
  • Choosing a platform
  • Social media metrics

Check out the infographic below to learn more.

How to Successfully Use Social Media: A Small Business Guide for Beginners

Sprout Social

 

 

 

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