Meta’s big play in the artificial intelligence (AI) arms race is showing promising early results when it comes to helping advertisers.
The world’s second largest digital advertising player reported better than expected revenue growth in the June quarter, up 22% to $US 39.07 billion.
Ad impressions increased by 10% and the average price per ad also rose 10%. The number of daily active users across the apps was 3.27 billion on average for June, an increase of 7%.
The parent of Facebook and Instagram sees AI playing an increasingly central role, improving ad delivery
Meta said advertiser adoption of AI tools continues to expand.
“It used to be that advertisers came to us with a specific audience they wanted to reach -- like a certain age group, geography, or interests,” said founder and CEO Mark Zuckerberg when briefing market analysts.
“Eventually we got to the point where our ads system could better predict who would be interested than the advertisers could themselves.
“Today advertisers still need to develop creative themselves. In the coming years, AI will be able to generate creative for advertisers as well -- and will also be able to personalise it as people see it.
“Over the long term, advertisers will basically just be able to tell us a business objective and a budget, and we're going to go do the rest for them. We're going to get there incrementally over time, but I think this is going to be a very big deal.”
CFO Susan Li said Meta believed generative AI will play a growing role in how businesses market and engage with customers at scale.
“We expect this technology will continue to make it easier for businesses to develop customised and diverse ad creative,” she said.
“We’ve seen promising early results since introducing our first generative AI ad features – image expansion, background generation, and text generation - with more than one million advertisers using at least one of these solutions in the past month.
“In May, we began rolling out full image generation capabilities into Advantage+ creative, and we’re already seeing improved performance from advertisers using the tool.
“Finally, we expect AI will help businesses communicate with customers more efficiently through messaging. We’re starting by testing the ability for businesses to use AI in their chats with customers to help sell their goods and services and to generate leads.
“While we are in the early stages, we continue to expand the number of advertisers we’re testing with and have seen good advances in the quality of responses since we began using Llama 3.”
eMarketer principal analyst Max Willens said any apprehensions about Meta's spending on AI and the metaverse are likely to be allayed by this quarter's results.
“While impression growth has slowed a bit, Meta's careful introduction of ads on Reels has led to a perfect storm of rising impressions and rising ad prices,” he said.
“With its margins as healthy as they are, Meta's investors should feel comfortable with the company's vigorous investments in its plans for the future."
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