Meta, the parent of Facebook, Instagram and Threads, reported a stronger than expected September quarter with advertising running ahead of forecasts.
Advertising revenue hit $US33.64 billion, 23% higher than the same three months last year. Overall revenue was $US34.15 billion, an increase of 23% or up 21% when allowing for foreign exchange fluctuations.
The company now faces a hiring backlog, after a campaign to reduce headcount following a surge during the heady days of the pandemic.
Ad impressions served across Meta services increased 31% in the quarter and the average price per ad fell 6%.
“Impression growth was mainly driven by Asia-Pacific and Rest of World. The year-over-year decline in pricing was driven by strong impression growth, especially from lower monetising surfaces and regions,” says Meta.
“While overall pricing remains under pressure from these factors, we believe our ongoing improvements to ad targeting and measurement are continuing to drive improved results for advertisers.”
Will Easton, managing director, Meta ANZ, says the latest earnings demonstrate the strength of Meta’s global business.
“We’ve experienced similar growth within Australia and New Zealand,” he says.
“Our significant investments into AI have helped deliver strong performance for our advertisers in Australia and New Zealand, and we look forward to helping them further grow and succeed as we enter the crucial retail season.”
Founder and CEO Mark Zuckerberg notes that AI advances are "driving a lot of our product and business performance. GenAI will be increasingly important going forward”.
AI tools are also driving results with more than half advertisers using Meta’ Advantage+ Creative tools to optimise images and text in their ad creative.
CFO Susan Li told analysts says Meta has been increasingly testing GenAI tools in the AI sandbox.
“And as they become more mature, we incorporate them into our ads manager directly,” she says.
“Beyond that, there is also a different set of sophisticated recommendation AI systems that power our feeds, Reels, ads, and integrity systems. For example, AI-driven feed recommendations continue to grow their impact on incremental engagement.”
Meta has seen a 7% increase in time spent on Facebook and a 6% increase on Instagram this year as result of recommendation improvements, she says.
Meta expects December quarter 2023 total revenue to be in the range of $36.5 billion to $40 billion.
And the company expects payroll costs to grow as it adds talent to support priority areas in 2024, a shift to higher cost technical roles.
September quarter 2023:
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