Meta gets a boost from new ad formats

Bulking up: Ahead of its third-quarter earnings, Meta has expanded its ad offerings for Instagram, Messenger, and Reels.

Right time, right place: For Messenger, Meta has developed a tool that uses machine learning to put ads in front of users who are most likely to make a purchase.

• The company assures that any user messages will not be analyzed by this software.

Choices, choices: The latest additions to Instagram give advertisers a bevy of options for reaching users.

• Display ads have been added to the Explore page, which is personalized to each user’s preferences and routines, as well as on profile pages of public, non-teen users.
• Some influencers can also put display ads on their profile pages.
• Augmented reality ads are being tested within Instagram’s main feed and stories feature.
• Multiadvertiser ads show a carousel of related promotions to accompany the original ad.

Let it scroll: To promote its TikTok-like product, Reels, Meta has added post-loop short-video ads that run in between Reels videos.

• In addition, a carousel of ads can be embedded at the bottom of a creator’s Reels.

Help wanted: These new features will give Meta a much-needed revenue injection.

• Last week, the company announced a hiring freeze, and now, is conducting “quiet layoffs” which could impact 15% of its workforce.
• In the second quarter, Meta posted its first-ever year-over-year revenue decline and the average price per ad on the platform decreased 14% year over year after an 8% decline in Q1.

Rocky road ahead: We forecast that Meta’s worldwide ad revenues would reach nearly $130 billion this year.

• But after Q2’s disappointing results, our analyst Debra Aho Williamson shared that it’s unlikely Meta will hit that number in 2022 and that growth in the third and fourth quarters will be slower than expected.

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