Meta’s year-end results are in and they’re pretty good. Against all expectations, the monthly number of active Facebook users is increasing slightly; reaching 2.96 billion in the last quarter of 2022. Obviously, it is above all the American market that is driving the weak growth of the Social Network. The “rest of the world”, as indicated in the report, shows a small decline.
If the Meta ecosystem is in good shape, it’s not thanks to Facebook. Despite a fairly active audience in the Asia-Pacific region, the figures are no longer really progressing on this more than mature platform. The application is losing ground among the younger generations and Internet users spend less time on it overall.
After cutting 11,000 jobs in the face of rising costs, Mark Zuckerberg remains optimistic and announces that 2023 will be the year of efficiency with more Reels and more artificial intelligence as the main drivers.
So yes, Meta is showing good results, but these are below those of the fourth quarter of 2021. The financial pressure and the reduction in the effectiveness of certain Meta Ads solutions are at the origin of this loss of speed. The web giant experiments and then abandons very expensive projects. On the general public side, we can also think of Portal and the various postponements of its VR headset, which is now planned for 2024.
And then there is the metaverse… An operating loss estimated at 13.72 billion dollars in 2022, so 4.28 billion in the last quarter. Obviously, this is an investment, but betting everything on this virtual universe seems too risky today. Indeed, despite the colossal budget devoted to its development, the metaverse should take between five and ten years to become a powerful lever. Suffice to say that things can still change by then, making Mark Zuckerberg a visionary or an extravagant.
What works today at Meta
In a nutshell, it’s advertising that keeps the store running. With an annual increase of 23% in the number of ads, Meta is always finding new advertising space and new formats to place content. We obviously think of Reels and revenue sharing in order to redistribute part of it to creators. The strategy being to counter the exodus to TikTok by simply attracting and retaining users a little more.
The first results seem to bear fruit, but only the future will show us if this calculation was the right one. Striving to monetize content to hold the attention of creators and Internet users may not be the most viable in the medium to long term. With more audience but less published content, advertising targeting could be impacted. Having less user data could lead to a loss of ad effectiveness.
Facebook’s audience is aging and Instagram has lost ground to TikTok. But, with 4 billion Internet users connected to at least one of its platforms, Meta remains the leader and can, by making the right strategic choices, remain so for a very long time.