- Among ad platforms that focus on keeping users engaged, only Meta overindexes against time spent. Plenty of major ad publishers are more concerned with clicks than with time spent (e.g., Google search, Amazon), but social networks and digital video platforms need to keep users tuned in for as long as possible each day in order to thrive. Only Meta seems to have figured out how to transmute user engagement into outsize monetization.
- TikTok is heading in the right direction but has a long way to go. TikTok’s ad revenue growth will greatly exceed its time spent growth this year and for the next several years, so its ratio in the chart above is set to improve. The same will be true to a lesser extent for the others, but only TikTok is growing its ad business fast enough to eventually overindex against time spent the way Meta does. This threshold, however, is many years away (assuming TikTok is not banned in the US first, of course).
What does it all mean? Meta’s ability to draw ad revenues so out of proportion with its user engagement is a testament to the company’s history of technical and operational prowess. AppTrackingTransparency (ATT) rocked the boat to be sure, but for the most part Meta has cracked the code when it comes to leveraging user data, facilitating ad placements, making life easy for marketers, and ensuring trackable ROI. Its audience scale also remains unmatched. Nonetheless, the magnitude of its advantage in the chart above might raise eyebrows—and suggests some advertisers may be in a rut of path-dependency left over from the days when Meta was more central for consumers than it is now.